DCH 59 Public Fundraising Regulatory Association
(PFRA)
PFRA's Submission to the Joint Committee on the
Draft Charities Bill
June 2004
Public Fundraising Regulatory Association (PFRA) response
to Draft Charities Bill 2004
1. Overview
1.1 PFRA broadly welcomes the principles outlined
in the draft legislation. As the self-regulatory body for Face
to Face fundraising (F2F) we feel that this offers an opportunity
to facilitate responsible and effective fundraising across England
and Wales. Charitable donations as a percentage of GDP have dropped
considerably in the last ten years, and F2F is one tool that can
arrest this.
1.2 F2F is effective in providing charities with
access to new money that they could not otherwise attract - £240M
in 2002 and £200M in 2003. This is crucial income in the
context of Government policy to enable charities to effectively
deliver services and, more broadly, to promote the future health
of the charity sector. However, it is important to note that
the decrease in income from 2002 to 2003 is a direct result of
inconsistent and arbitrary regulatory intervention into charitable
fundraising.
1.3 The implementation of this legislation is a complex
issue. The clear intention of the Draft Bill is to facilitate
responsible fundraising and increase the charitable income from
new sources deriving to charities. PFRA has grave concerns that
it will instead result in disproportionate controls on the practice
of F2F and result in considerable loss of charitable income.
1.4 These fears are a direct reflection of our experience
to date with the implementation of the existing regulatory framework.
If F2F loses its cost-effectiveness through additional administrative
burdens, or local prejudice, the sector will struggle to find
another medium with which to replace it.
2. Burden on charities
2.1 The Draft Bill clearly aims to create a clear,
unified and consistent structure for the licensing of Public Collections,
avoiding unnecessary additional administrative burdens on charities
and Local Authorities alike. The Bill provides very little detail
on how the new licensing system will work. The detail is to be
left to Guidance Notes that will lack statutory force.
2.2 This creates the danger that what is conceived
as a uniform system in principle will be far from uniform in execution
as Local Authorities make different decisions on such issues as
the period of permits to be issued, the definition and capacity
of a site for the purposes of public collections and the use of
the powers which they retain to refuse permits.
2.3 PFRA feels that the Guidance Notes will be crucial
in achieving consistency. Unless given a statutory footing, they
will not be effective in facilitating fundraising in a consistent
and proportionate way and will result in a significant decrease
in charitable income - an income on which many charities now depend.
3. Burden on Local Authorities
3.1 Adopting the Lead Authority model will mean the
burden of unified regulation falling disproportionately heavily
in certain areas. A limited number of London boroughs will receive
a significant volume of applications reflecting the concentration
of charities in certain areas. London Boroughs currently have
no responsibility for charitable fundraising; it is fair to assume
that this will present significant management challenges to some
of the Boroughs involved.
3.2 Local Authorities will also have to process Permit
applications. The Home Office's estimate of London-wide resource
requirements is wildly unrealistic. This relates to the cash
collections licensed by the Metropolitan police. The Met does
not view F2F as licensable under the terms of the 1916 Act, and
has made no allowance for this in its figures.
3.3 The PFRA currently manages 148 delineated Fundraising
Sites in London. The requirements of the draft bill - that individual
Permit applications should be for specific dates - yields a conservative
estimate of Permit applications to London Boroughs of at least
14,000 per annum. PFRA currently fulfils this management role,
and has three years experience of so doing.
3.4 PFRA recognises that the management of permits
is a complex issue, and in response has developed a number of
initiatives. Pilot schemes have been established with receptive
local authorities to define and manage fundraising capacity.
3.5 These schemes have proved effective in equitably
managing fundraising activity and we believe their expansion to
be straightforward and desirable. They are highly cost-effective
as they are provided without charge to the Local Authorities involved,
giving them a single point of contact and avoiding the need to
respond individually to a plethora of applications.
3.6 Local authorities will seek to balance requests
for different types of fundraising activity, impacting on estimates
of local capacity. A consequence of the increase in licensable
activity will be an increase in appeals, and concomitant costs.
4. Clarity and Interpretation
4.1 As has been seen, PFRA's gravest concern is with
regard to the as yet unpublished Guidance Notes; the question
of implementation is crucial and if handled inappropriately will
see a substantial reduction in charitable income.
4.2 In our experience there is substantial variation
in Local Authority views of F2F, and the capacity for fundraising.
In 2003, arbitrary re-assessments based on personal prejudice
led to restrictions on fundraising resulting in the loss of an
estimated £40 million pounds to charity.
4.3 The Home Office data on the cost of processing
cash collection licences shows wild variations, varying by over
7250%.. These figures offer little reassurance as to the consistency
of application of non-statutory guidance notes. We would urge
the Government to make guidance statutory to ensure compliance.
5. Openness and Transparency - Disclosure
5.1 PFRA supports a declaration distinguishing paid
fundraisers from volunteers. We question the rationale of requiring
comprehensive financial information to be offered at this point,
and how meaningful this information can be.
5.2 Professional fundraising is a multi-faceted,
modern phenomenon. Educating the giving public should begin with
the general message that it costs money to raise money in any
significant way, not a breakdown of cost ratios.
5.3 Why the requirement to declare public collections
costs when there is no such burden on press, direct marketing
or TV activity? This is disproportionate, inconsistent and prejudicial.
5.4 We propose that the public collections disclosure
should only seek to clarify if a fundraiser is paid or a volunteer.
Charities can provide the relevant information to the Charity
Commission through SORP/SIR, and then clearly communicate cost
to income ratios, in context, via its annual report. This is
a consistent and proportionate response to the issue of transparency.
6. Public Acceptance
6.1 The Government proposals are intended to provide
a balanced package which will build trust and improve confidence
in charities. We are concerned that this package of measures
will not achieve this. Effort must be targeted at improving understanding
of the need for fundraising in general and the effectiveness of
the methods employed.
6.2 The crucial role of small, impulse donations
of cash is highlighted, even whilst acknowledging that these only
constitute less than 6.5% of the value of all individual donations
given. Experienced charity fundraisers repeatedly affirm that
regular gifts over a sustained period of time - precisely the
sort garnered by F2F - are infinitely more effective.
6.3 The regulatory principles in the Draft Bill are
focused on a declining medium of fundraising at the expense of
a successful one, doing a great disservice to charities and stifling
innovation in fundraising.
6.4 The Explanatory Notes refer to the alleged public
nuisance of F2F, in the absence of any supporting evidence. The
Home Office records that only five out of 376 licensing authorities
in England and Wales made a reference to a concern in this regard.
6.5 Regulation without education will leave the public
no better off. The public should understand why fundraising takes
place at all, what methods are most effective, how to identify
potential fraud and to whom to complain for enforcement and redress.
6.6 These reforms should properly balance regulation
with education; otherwise those that currently evade regulation
for the purposes of fraud will continue to do. Rather than achieving
this, these measures could in fact damage efforts to encourage
charitable giving and we feel that its stated intention is at
risk.
6.7 Finally, we would implore the Home Office to
consolidate these changes into one Bill to improve the clarity
of the new legislation.
Part 3 Clause 41.Para 3
Based on the Metropolitan Police's current estimated
costs of c.£33k per annum for approximately 226 applications
In consultation with the Met, not "separately"
as stated in the Explanatory Notes 9.4.9
140 sites x two visits per week x 52 weeks
See Explanatory Note 9.1.3
Part 3 Clause 35
Alan Milburn / Scrutiny Ctte Press release 13th
May 04; Fiona Mactaggart, Written Ministerial Statement 25th
may 04; Fiona Mactaggart Press Release 27th May 04.
Explanatory Note 2.4.3
Explanatory Note 2.4.7
Regulatory Impact Assessment section 10
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