Finance & law, Law, Fundraising

Charity law - fundraising regulations

A new regime for fundraising.

Charity law changing

Following criticism of charity fundraising practices in parliament and the media, NCVO’s chief executive Sir Stuart Etherington was appointed by government to lead a review into the self-regulation of charity fundraising over the summer of 2015. The review recommended the Institute of Fundraising be stripped of responsibility for setting standards for fundraising and that a new fundraising regulator be established. The proposal was for the new regulator to be funded by the larger fundraising charities and for a “fundraising preference service” to enable people to ‘reset’ their charity marketing preferences.

The recommendations of the review have been accepted in full by the Government and the new Fundraising Regulator is up and running. New regulations are expected shortly which will impact on all fundraising charities.

The regulations are not without controversy:

  • There is some anxiety about how the fundraising preference service will work and whether bad practice by one charity could then prevent other charities contacting donors who effectively opt-out of all charity marketing by using the “reset button”.
  • There are also concerns that regulatory requirements of the Fundraising Regulator and Information Commissioner in relation to data protection and the requirement for “explicit consent” or an “opt-in” approval, could go further than the legal requirements and make the fundraising process more costly and difficult to administer.

New charity law

The Charities (Protection and Social Investment) Act is now law.  As well as introducing new powers for the Charity Commission, the Act contains provisions relating to fundraising.  In particular, the Act includes:

  • A requirement for annual reports to include a statement on the approach taken by the charity to fundraising, information about the charity’s fundraising activities, what the charity has done to protect vulnerable people and how many complaints they received.
  • New requirements for agreements with professional fundraisers or commercial participators to include details of how vulnerable people will be protected from unreasonable intrusion, unreasonably persistent approaches and undue pressure.

The Charity Commission has consulted and is in the process of issuing revised guidance on fundraising.

Echoing a recommendation of the Etherington review, the Commission said in a covering statement that “The revised guidance reflects the need to put public trust back at the heart of charity fundraising. It makes absolutely clear that trustees are in the driving seat of their charity’s approach to fundraising.”

The draft guidance highlighted six key responsibilities for trustees: effective planning, supervising fundraisers, protecting the charity’s reputation and other assets, complying with fundraising law, following recognised standards and being open and accountable.

The draft guidance does not include details of the Fundraising Regulator, which the Commission says will be included in the final version.

What lies ahead…

The Fundraising Regulator is now established and we expect volumes of new regulatory guidance and best practice guidance.  There is likely to be continued emphasis on the role of trustees to oversee fundraising.  Charities that work with commercial participators and professional fundraisers will need to update their standard agreements.

There are real concerns about the changes leading to a drop in income for some charities, but we also expect that charities will find entrepreneurial new fundraising channels and techniques that meet the needs and requirements of the new regulatory regime.

We are delighted to welcome Stephen Dunmore the current CEO of the Fundraising Regulator to discuss “Process, Plans and the next steps” at the Charity Law Conference on 14 June.

Find out more information and book a place at the Charity Law Conference on 14 June here now.