Regulating fundraising for the future

It has been a difficult summer for charities. Negative media coverage has been to the detriment of us all. The stories picked up on failings in a relatively small number of charities, but tapped into a much wider, much stronger, public concern about how charities ask for money. Criticism has rained in from all sides and I think many would agree that this cannot and should not continue.

This summer, I chaired a cross party review of fundraising regulation for the Minister for Civil Society. During the course of our review we have heard many voices and read many concerns, whether for the donors that give or for the future of the charities whom we hold so dear. I believe that we have been given clear signals as to the future direction of fundraising and the checks and balances that should remain in place around it.

Download the report Regulating fundraising for the future: Trust in charities, confidence in fundraising regulation (PDF, 630kb).

Trustees are key

First, and most importantly, we have heard that trustees must know what fundraising activities are taking place in their name. The crisis of trust we face is not simply a fundraising issue, it is a governance issue. Our review has therefore concluded that trustees need a clearer view and a stronger hand on the fundraising tiller.

A new regulator

Secondly, charities and other fundraising organisations need a new, more visible and effective fundraising regulator. The public have to know where to report their concerns. We are appreciative of the work that the Fundraising Standards Board has done, but we believe that the confidence of the public requires a new approach.

We have concluded that a new regulator with stronger powers to sanction, universal coverage and better resources is a necessity. This includes the establishment of a new Fundraising Preference Service so that the public can easily stop unwanted fundraising communication from charities.

Clear roles and responsibilities

We have also concluded that the Institute of Fundraising should hand over responsibility for setting the rules which govern fundraising – the Code of Practice – to the new regulator.

One of the most important issues to emerge from our review is that the public interest overrides any professional interest. Nothing less than handing over responsibility to the new regulator for setting the rules will do.

Fundraising regulation at present is unnecessarily complex – too many bodies with competing interests. We have recommended that the Public Fundraising Regulatory Association should merge with the Institute of Fundraising, but that its regulatory responsibilities should move to the new fundraising regulator. Better regulation requires a clear separation of roles and interests.

We heard a clear message from charities and the government that there is little appetite for state regulation and all that this entails. If we are to maintain the trust of the public we must be able to show that we can regulate ourselves.

Nevertheless, some breaches of the rules on fundraising may raise concerns that there has been a breach of trustee duties. In such cases, the Charity Commission can and should investigate. And we believe that reporting to parliament – not the government – provides for both accountability and independence.

I am cautious of statements that this review, and other activities in the fundraising world, represent a turning point or the crossing of a Rubicon. They do, I hope, represent the start of a long, hard journey to rebuild public confidence in fundraising regulation and trust in charities.