DCH 60 Institute of Fundraising
The Institute of Fundraising's
Submission to the Joint Parliamentary Committee on the Draft Charities
Bill:
Reserve Powers for Statutory
Regulation and Commercial Participators' Statement
1.0 ABOUT THE INSTITUTE OF FUNDRAISING
The Institute of Fundraising (registered
charity number 1079573) represents fundraisers and fundraising
throughout the United Kingdom. It is a membership organisation
committed to the highest standards in fundraising management and
practice. Members are supported through training, networking,
the dissemination of best practice and representation on issues
that affect the fundraising environment. The Institute of Fundraising
is the largest individual representative body in the voluntary
sector with 4000 individual members and nearly 200 organisational
members. Membership reflects income to the sector of some 5 billion
per annum and delivers more than £12 billion service-output
covering all areas of social activity. Members are drawn from
all types of Voluntary and Community Organisation (VCO), from
large international charities to very small voluntary and community
groups.
2.0 INTRODUCTION
The Institute of Fundraising's evidence
covers the areas of public collections and self-regulation of
fundraising. The Institute believes strongly in the benefits of
self-regulation and is actively developing a self-regulatory model
in partnership with the Voluntary and Community Sector (VCS).
At the same time, we also favour clearer and more consistent regulation
of public collections, rather than a deregulated framework for
them. Self-regulation needs a healthy, balanced environment of
regulation to provide it with support and structure.
We have one recommendation that covers
the Bill in its entirety. We believe that the final draft of the
Charities Act should be presented as one coherent and consolidated
document. The format of the Draft Bill has proved to be highly
inaccessible, in particular for smaller charities with little
experience in or resource for responding to a consultation such
as this.
3.0 RESERVE POWERS FOR SECRETARY
OF STATE TO INTRODUCE STATUTORY REGULATION OF FUNDRAISING
We support the inclusion of reserve
powers for the Secretary of State in the Bill. Self-regulation
is likely to be measured by two core indicators; the degree to
which high standards of fundraising practice are attained and
increased participation in self-regulation by fundraising organisations.
We would like to see the publication of the criteria against which
the Home Secretary intends to measure the success of a self-regulatory
scheme; we would not wish to see this set out in statutory guidance.
The reasons for this are that:
- Relevant and accurate research
on the range and scale of organisations falling within the scope
of a self-regulatory scheme is not yet available. Meaningful targets
cannot be set until the scheme's scope is established. We believe
that neither the VCS nor Government wish to see a statutory scheme
imposed on the sector at a future date as a consequence of inappropriate
or insufficiently flexible targets set in statute now. The Institute
does not believe that the criteria can be set until baseline research
has been carried out. We will be making recommendations in time
to inform the drafting of the necessary regulations.
- The sector has worked in partnership
over the last year to develop plans for a self-regulatory scheme
for fundraising. Government and the sector should work together
to develop the criteria against which the success of the scheme
can be judged. A successful self-regulatory scheme should have
targets that are regulated by the sector, not Government. Government
should evaluate the success of the scheme over an agreed period
of time.
- Fundraising is an innovative discipline.
As fundraising techniques evolve, criteria for intervention would
also need to change. Flexibility should be retained in the Bill
to accommodate this.
3.1 Background to Self-Regulation
In 2002, following the publication
of the Strategy Unit report, "Public Action, Private Benefit",
the Institute of Fundraising commissioned an independent report
by Rodney Buse that examined the range of options available to
the sector for setting up a self-regulatory scheme. The consultation
process surrounding the Buse report has allowed the debate on
self-regulation to move on from citing concerns that there was
a lack of clear evidence to justify the introduction of a scheme,
to determining how such a scheme can be used to drive up standards.
The Institute has achieved a broad general consensus of support
for our proposals from the major umbrella bodies and the VCS as
well as from our membership. We are now seeking to establish a
system of best practice that incorporates the following:
- The capture of fundraising organisations
through a voluntary membership scheme.
- A requirement from members to abide
by a set of Codes of Fundraising Practice. These standards cover
the whole of the United Kingdom. Parallel consultations to ensure
national and regional accessibility of the scheme are taking place
in Scotland.
- A requirement that members must
publicise their membership to supporters and donors by carrying
of a quality mark.
- Donors having access to an independent
complaints procedure if they fail to get satisfaction with their
initial complaint to a charity
- A scheme that is structured in
such a way that participation is not limited by either the size
or the budget of an organisation. Any membership fee levied to
fund the development of standards must not act as a barrier to
the participation of small fundraising organisations.
- A scheme that puts responsibility
on trustees to participate in it and charges them with introducing
systems to check that best practice is being followed. Such a
scheme is designed to supplement and support trustees' responsibilities
for good governance.
- A self-regulatory scheme must be
seen to work in full and effective partnership with existing regulators
of fundraising activities.
4.0 COMMERCIAL PARTICIPATORS
The Institute believes that transparency
in fundraising relationships is essential. However, we do not
believe that the proposed changes to the commercial participator
statement would achieve more meaningful understanding of commercial
participations than currently exists. Part 3 35 (4) refers
to the consideration given for goods or services or the royalty
on a product or service. All contracts should specify this return;
indeed, the "unit rate" and the proportion it represents
of the return to the Commercial Participator, ought always be
clearly defined. It is not as straightforward to determine the
total return to charitable causes. Part 3 35 (5) proposes
that the "notifiable amount" represents the actual or
estimated return to the charity for the commercial participation.
We believe that if this relates a) to the total return of the
participation to the charity that return can only be defined following
the audit of the participation and is therefore unlikely to be
able to be defined with any accuracy. If this proposal relates
to b) the return on a unit or particular service rather than total
return, it should be identifiable within the contract governing
the relationship. The Bill should clarify whether the object
of Part 3 35 (5) is a) to ensure that the total return or estimated
total return on an exercise in commercial participation is stated
in contracts. If this is the intention, further consultation
on the reporting structures necessary to achieve this will be
essential. We would hope to see a commitment to consultation
included in the Bill.
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