Rules For Charity Fundraisers
The Fundraising Regulator regulates charitable fundraising in England, Wales and Northern Ireland. It aims to build public trust and confidence in charities by promoting and maintaining best practice in fundraising, in order to protect donors and support the vital work of fundraisers.
It also operates a voluntary system of fundraising regulation, and participation in this system demonstrates that trustees and charities are taking these responsibilities seriously.
The Charity Commission’s guidance, ‘Charity fundraising: a guide to trustee duties’ (CC20), places a duty on all trustees to ensure that their charity’s approach to fundraising complies with charity law and best practice.
In addition to this general duty, s 13 of the Charities (Protection and Social Investment) Act 2016 (the Act) sets out further fundraising reporting requirements. These further requirements are compulsory for certain charities that are required to file audited accounts. The Act was introduced in order to raise charity fundraising standards and in response to a perceived need among the public for charities’ fundraising activities to be better regulated following the death of poppy seller, Olive Cooke.
The Act requires charities to provide a statement on fundraising in their annual reports. Following a recent analysis of some 106 annual reports filed with the Charity Commission, the Fundraising Regulator found that only 40% of those charities included a fundraising statement that complied with the legal requirements set out in the Act. Although some charities met their obligations in full, less than half were compliant with the Act.
The Regulator has reported that common issues included:
- Failure to provide enough detail about how fundraising campaigns are run and managed within the charity, including who carries out the work.
- Failure to demonstrate how the Code of Fundraising Practice is used to guide the charity’s fundraising work.
- Failure to provide thorough descriptions about any fundraising carried out on behalf of the charity by a third party, such as a commercial participator or professional fundraiser.
- Failure to include detail around the number of fundraising-related complaints received by the charity.
- Failure to provide a sufficient explanation of how vulnerable people and others are protected during the charity’s fundraising work from unreasonable intrusion on their privacy, unreasonably persistent approaches or undue pressure to donate.
While it’s important to remember thatthis has been the first year of reporting in this manner, the Fundraising Regulator has made it clear that full compliance is expected. This new guidance also demonstrates the Regulator’s commitment to working with charities to ensure they understand the reporting requirements, particularly smaller charities that have limited fundraising budgets.
Following its analysis, the Fundraising Regulator published its Good practice guidance on reporting your fundraising on 15 January 2020. The new guidance includes practical information on:
- what the fundraising statement should consist of (see below);
- examples of a fully compliant fundraising report;
- the Charity Commission’s expectations; and
- what charities can expect from auditors and independent examiners.
How Can Charities Improve?
Charities that are required to have their accounts audited must include a statement on each of the following six points in their annual trustees’ report:
- The charity’s approach to its own fundraising activities and any fundraising activities done on its behalf. For example, by a professional fundraiser or commercial participator.The statement should include details around how fundraising campaigns are run, including who undertakes the work, the methods used and how the public are asked to participate.
- Where applicable, confirmation that the charity has registered with the Fundraising Regulator and complies with the Code of Fundraising Practice or any other suitable scheme or standard.While registering with the Fundraising Regulator is voluntary, it demonstrates a commitment by the charity to comply with the Act and Code of Fundraising Practice. The Fundraising Regulator is the only voluntary regulation system for fundraising which operates across the charity sector in England and Wales. Where a charity is not registered with the Fundraising Regulator but seeks to adhere to the code, the statement should set out any equivalent approach and how it meets the standards required in law and reflects best practice.
- Whether or not the charity has failed to comply with the scheme or standard mentioned above.
- Where the charity has monitored fundraising activities undertaken on its behalf by others (such as commercial participators or third party organisations), how did it monitor these activities?This should include information around how a charity maintains standards. For example, through training, checking work or by managing contracts.
- The specific number of complaints received by the charity or anyone working on its behalf, about the charity’s fundraising activities.
- What the charity has done to protect vulnerable people and the wider public from certain behaviour, such as unreasonable intrusion on a person’s privacy, adopting unreasonably persistent methods to secure a donation or exerting undue pressure on a person to give a donation.
What Next?
The Fundraising Regulator hopes that the new guidance will assist charities to better understand their fundraising reporting obligations under s 13 of the Act. The Regulator has also made clear its intention to continue to review and monitor charity compliance with the reporting requirements on a regular basis to measure improvements in reporting.
This article was originally published in New Law Journal