Charities (Protection and Social Investment) Bill

Written evidence submitted by the Institute of Fundraising and the Public Fundraising Association (CHB 02)

Charities (Protection and Social Investment) Bill: Committee Stage evidence


About the Institute of Fundraising and the Public Fundraising Association

The Institute of Fundraising (IoF) is the professional membership body for UK fundraising, with over 5500 individual members from 2500 different charities and around 450 organisational members.

The Public Fundraising Association (PFRA) is the membership body for charities and agencies carrying out face to face Direct Debit fundraising.

The IoF and the PFRA are in the process of merging to form a single professional membership body across the fundraising sector.


Fundraising reforms: overview

The examples of poor fundraising practice exposed over the summer shocked the charity fundraising sector. It demonstrated the urgent need for charities and the regulatory structures surrounding charity fundraising to change. Both public trust and the ability to raise funds are vital to the future of charities of all sizes and the good work they do across the county and around the world.

In September the review of charity fundraising practice and the regulatory system, chaired by Sir Stuart Etherington, published its report. The report’s recommendations included the establishment of a single, universal and more powerful independent Charity Fundraising Regulator working more closely with the Charity Commission and other statutory bodies. A summary of the report’s recommendations is included at the end of this paper.

The recommendations from Sir Stuart Etherington’s report have all been accepted by the Government, and the new structures for regulation are anticipated to be in place by April 2016. The Institute of Fundraising and Public Fundraising Association welcomed the report’s recommendations and have been working together to support the establishment of the new Charity Fundraising Regulator.


The Charities (Protection and Social Investment) Bill

Fundraising amendments made in the Lords

The Charities Bill was amended during its passage through the House of Lords to strengthen the law on charity fundraising. Clause 14 requires charity trustees to set out in their annual reports their approach to fundraising, and in particular how they ensure the protection of vulnerable people and other members of the public from "unreasonable intrusion on a person’s privacy", "unreasonably persistent approaches" and "placing undue pressure on a person to give".

The changes under Clause 14 also require these provisions to protect vulnerable people and the wider public to be included in the agreements between charities and fundraising agencies working on their behalf. This includes specifying measures to enable charities to monitor compliance with these requirements.

IoF and PFRA position:

The IoF and PFRA welcome these additional measures to strengthen the focus on fundraising practice and provide an even greater emphasis on the protection of vulnerable individuals and the wider public.

New reserve powers in case self-regulation fails

The Government has announced that they will bring forward amendments to strengthen and support the implementation of the changes to charity fundraising regulation outlined in the Etherington Review. During Second Reading the Government announced they will seek to amend the Bill to add 2 reserve powers. Firstly, the reserve power to compel charities to sign up to the new Charity Fundraising Regulator if necessary. Secondly to mandate the Charity Commission to take over responsibility for fundraising regulation should the charity sector fail in making the new self-regulatory structure work.

The Etherington Report was clear that an enhanced and reformed system of self-regulation was the most effective way to regulate fundraising. The government has made it clear that these powers would only be used should the new, stronger system of self-regulation currently being put into place fail.

IoF and PFRA position:

The IoF and PFRA understand the reasons for amending the Bill to introduce these reserve powers and do not object in principle to their introduction. We hope that ultimately the reserve powers being introduced will not be needed and the new self-regulatory structures will be effective. We will continue to work to support the new system of stronger self-regulation to help ensure its success, without the need for the reserve powers to be used.


Points raised at Second Reading

Street Fundraising

During the Second Reading debate a question was raised about the way agency fundraisers explain the fees they are paid by charities for recruiting donors. The law was only recently changed by the Charities Act 2006, coming into force in April 2008. This implemented additional disclosure rules on fundraisers, meaning the UK now has some of the world’s most transparent rules on how charities work with agencies.

For example, all professional fundraisers working on behalf of a charity must now inform a donor of how much their organisation will be paid; how this fee was calculated; and importantly, how much the charity hopes to raise in total. We fully support this level of transparency which allows potential donors to make informed decisions. The PFRA and its local authority partners (107 councils in total) monitor compliance with these rules, conducting over 700 inspections a year, and issue financial penalties for non-compliance.

The IoF and PFRA believe that the existing requirements are effective and do not believe there is evidence that further changes would improve donor confidence or strengthen compliance.

Additional information:

The new system of fundraising regulation

The main recommendations from the charity fundraising review led by Sir Stuart Etherington and forming the basis of the new charity fundraising regulatory system are:

A new, single independent Charity Fundraising Regulator will be established.

The remit of the regulator will extend to all charities who fundraise.

It will be paid for by a levy on charities themselves and will have stronger sanctions where organisations break the code of practice.

The new regulator will be independent, but will have closer links with statutory regulatory bodies including the Charity Commission, OSCR, and the Information Commissioners’ Office.

The Charity Fundraising Regulator will take over responsibility for both setting the Code of Fundraising Practice which charity fundraisers adhere to, and it will hear and act on complaints from the public. This will happen through two committees – a Fundraising Practice Committee and Complaints Committee.

In November the Minister for Civil Society announced that Lord Michael Grade would be the interim chairman of the new regulator.

The two bodies representing the charity fundraising sector – the Institute of Fundraising and the Public Fundraising Association – should merge to form a single professional membership body.

Fundraising Preference Service is to be set up and run by the new Charity Fundraising Regulator. This will be a service where individuals can register if they no longer wish to be contacted for fundraising purposes.

The direction of travel in these recommendations have been widely supported by charities and sector bodies, including the IoF and Public Fundraising Association. The Government has said that they will be implemented in full.

A copy of the ‘Regulating Fundraising for the Future’ report can be downloaded from the NCVO website at www.ncvo.org.uk.

December 2015

 

Prepared 15th December 2015