The end of self-regulation for charities? Government report recommends new fundraising regulator

In September 2015, a government commissioned panel published a review into the effectiveness of the current self-regulatory system for charity fundraising in light of recent high profile cases of malpractice. The published report details the current system of self-regulation and proposes a new approach, a sole regulator of fundraising practice established within a new co-regulation framework.  The focus of the new regulator will be the fundraising practices used by and on behalf of charitable organisations.

The review was commissioned following extensive media courage of concerns about the way in which some charities approach and communicate with potential donors. In May 2015, Olive Cooke, a 92 year old volunteer poppy seller for the Royal British Legion, committed suicide. Following her death, it emerged that she had received thousands of phone calls and letters from charities asking her for donations. Further concerns subsequently emerged about the practices used within this sector, including the discovery that charities had sold personal data about an 87 year old man who had dementia to scam organisations who had used this data to target him. This led to increased pressure from the public to review the practices adopted by charities and ensure to that a proper and effective system is in place to regulate this sector.

Current regulatory regime

The currently regulatory regime is made up of a number of different bodies which regulate a mixture of specific activities and organisations.

The Fundraising Standards Board (FRSB) is currently the independent self-regulator for fundraising in the UK. The FRSB was established in 2006 and the onus is on charities to opt into regulation. Members of the FRSB are required to adhere to a set of standards and a Fundraising Promises in order to maintain public confidence in the charitable sector. The Institute of Fundraising (IoF) is the professional membership body for fundraisers and this organisation sets out good practice standards for the fundraising community.  In addition, face-to-face fundraising on the street (known as ‘chugging’) is currently regulated by the Public Fundraising Regulatory Association (PFRA).

Proposed changes

The review made a number of significant recommendations in order to simplify and strengthen the regulation of this sector;

• A new, single ‘more visible and effective’ regulator – the report recommends that the FRSB should be replaced with a new body, the Fundraising Regulator. The review found that a new regulator ‘is a necessity’ and that it should have increased sanctioning powers, including naming and shaming, cease and desist orders, compulsory training and the requirement for clearance of future campaigns by the regulator. In addition, it has been recommended that a Fundraising Preference Service should be created so that the public can quickly and easily prevent unwanted fundraising communication from charities by opting out of all charity contact;
• Highlighting the roles of trustees – the report recommends that trustees should know what fundraising activities are taking place within their charity and that there should be greater oversight of these practices by the trustees;
• A single code – it has been recommended that a single Code of Fundraising Practice should be established and those organisations that wish to show their compliance with the Code should be able to register with the Fundraising Regulator;
• Simplification of the regulatory regime – it was found that fundraising regulation at present is unduly complex with too many different bodies involved in this sector. It has been 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.

The future

The review concluded that it is the responsibility of charities to maintain relationships with donors and the wider public and noted ‘we welcome any move that shifts fundraising away from aggressive or pushy techniques and instead towards inspiring people to give and creating long-term sustainable relationships’. There is a clear need for a new and effective fundraising regulator. The review found that there is a resistance within the sector to move towards state regulation. As such, steps must be taken to demonstrate that self-regulation can be effective and that the public can be adequately protected and have confidence in a new and more robust fundraising regulator. 

It is clear that the government wants the public to be better protected by adequate safe-guarding against potential harassment from charities and fund-raising bodies.  We will have to see whether the recent recommendations are adopted, which could mean huge changes in the way charities are regulated.

Further information

If you have a query in relation to the above blog, please contact Melinka Berridge, Clare Hastie, or a member of our team. You may also like to visit our Regulatory and Professional Discipline page.

Kingsley Napley has extensive experience of advising regulators on all aspects of governance and law relevant to their operations and regulatory functions, including their fitness to practise regimes. Having worked in this field for several decades, our team of experienced lawyers have built up considerable knowledge of all of the major regulatory sectors.