The body charged with regulating fundraising must be closed down and replaced with a more effective outfit with tougher sanctions, a review of the self-regulatory system has recommended.
The review, commissioned by the government following concerns about how charities have made contact with potential donors, says that the Fundraising Standards Board (FRSB) has been ineffective in regulating fundraising and has lost the confidence of the public and charities. It recommends it be replaced with a more powerful body with the public interest at its heart, which can ensure that vulnerable people are protected.
The review says the new regulator should set its own standards for fundraising good practice. Currently, the FRSB adjudicates against standards set by fundraisers themselves via their trade body, the Institute of Fundraising. The panel believe this is an inappropriate arrangement which is not in the public interest and has damaged fundraising regulation.
The FRSB has been in a weak position since its creation, having no control over the setting of standards, but has also been too eager to resolve complaints informally rather than taking tough action against breaches of the fundraising code, the panel found. The proposed Fundraising Regulator would be better funded by charities and have strong links with the Charity Commission and Information Commissioner to ensure charities followed its rules. It would have control over the rules charities must follow and would prioritise the public interest. All charities that spend over £100,000 a year on fundraising from the public, around 2,000 organisations, would be expected to contribute to the costs of the regulator.
The review also recommends the creation of a new ‘Fundraising Preference Service’ for the public to opt out of fundraising communications. The simple service would act as a ‘reset button’ for those who are unhappy with the number of charities contacting them. The service would be overseen by the new regulator. It would oblige charities to stop sending fundraising requests or making phone calls to those who have opted out. It would mean the public could opt out of fundraising requests from multiple charities without the inconvenience of contacting them separately.
Members of the public would still be able to receive information from those charities they are interested in by opting in to hear from them subsequently.
Charities registered with the new regulator would be entitled to use a kitemark to demonstrate to the public that they adhere to the rules. Charities which seriously or persistently breach the rules would be named and shamed and could be forced to halt their fundraising until problems are resolved.
The review panel comprised three peers from different political parties, Lord Leigh of Hurley, Baroness Pitkeathley, and Lord Wallace of Saltaire, and was chaired by Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations.
The panel recommends that the new regulator, provisionally entitled The Fundraising Regulator, reports to parliament’s Public Administration and Constitutional Affairs Committee on a regular basis to ensure parliament has an opportunity to scrutinise its work on the public’s behalf.
Commenting, Sir Stuart Etherington said: ‘Britain is a tremendously generous country, and people have enormous goodwill for charities. But charities must not take that for granted. We seem to have found ourselves in a position where charities didn’t think hard enough about what it was like to be on the receiving end of some of their fundraising methods. They thought too much about the ends and not enough about the means. This has been a clear wake-up call and now is the time to tighten the standards.
‘The current system of self-regulation has quite clearly failed to prevent serious breaches of trust and widespread dissatisfaction. I believe the changes we propose will be an effective way to reform the system.
‘The reality is that most people give to charities when they are asked to, rather than spontaneously, so charities do need to ask. But they should inspire people to give, not pressure them to. We need to see a shift to long-term thinking where charities form meaningful relationships with donors. This will be a more sustainable approach.
‘I understand the public are frustrated when they feel they can’t easily control what they receive from charities. The new Fundraising Preference Service will mean that the public have a reset button for communications from charities, ensuring they only hear from those they want to.
‘I am confident that charities understand the pressing need to restore confidence in fundraising and will back these proposals.’
Lord Leigh said: ‘We must do everything we can to protect the special position of trust that charities hold. Charities should be a conduit by which the public’s time, energy and donations can be transformed into work that benefits society. But that must mean a partnership between charities and donors, rather than donors being seen as a means to an end. I believe the regulatory framework we have proposed will help to ensure the highest standards in fundraising and care of donors.’
Baroness Pitkeathley said: ‘This is an issue of great public interest and concern. I know that charities understand this and that they are aware that changes are required. The mechanism to hold the new regulator to account, reporting to the public administration and constitutional affairs committee, will be an important way of ensuring that it remains effective and the public interest is upheld.’
Lord Wallace said: ‘Charities are playing an ever-greater role in society. This is something that many of us welcome. But with this greater role comes a responsibility to work to the highest standards of integrity and accountability. We believe that our proposals will ensure charities will know the standards expected of them and live up to them.’