Replacing the Fundraising Standards Board with a new regulator responsible for setting standards for raising money is among sweeping changes proposed for self-regulation of fundraising.

A review panel chaired by NCVO chief executive Sir Stuart Etherington has delivered its recommendations today, headlined by a call for a new Fundraising Regulator. The regulator would be funded by a levy on fundraisers, and have greater powers to crack down on non-compliance.

The recommendations would see responsibility for the Code of Fundraising Practice removed from the Institute of Fundraising, sitting instead with a Fundraising Practice Committee within the new regulator. The committee should include an “appropriate balance” of fundraising expertise, donor and public representation, and legal expertise.

The panel also suggested a representative of the Institute of Fundraising be given observer status on the committee.

Publishing the review’s findings, Etherington said charities have thought too much about the ends and not enough about the means when it comes to fundraising. The current system of self-regulation has “quite clearly failed” to protect public trust, Etherington said, but the proposed changes would effectively 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,” Etherington said. “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.”

Recommendations

The panel, comprised of Lord Leigh of Hurley, Baroness Pitkeathley, and Lord Wallace of Saltaire, recommends merging the IoF and Public Fundraising Association (PFRA). The merged organisation would focus more closely on best practice and compliance.

The merged IoF and PFRA would carry out the existing PFRA role of allocation of space for street fundraising and mystery shopping.

However, regulatory aspects of the PFRA’s current work such as acting as a repository for public complaints about street fundraising would transfer to the Fundraising Regulator.

The review concluded self-regulation remains “the most appropriate mechanism for the charity sector to show its commitment to high ethical standards which safeguard public trust and confidence”.

However, the self-regulatory system would need to be backed by close working relationships with existing statutory regulators such as the Charity Commission, Office of the Scottish Charity Regulator, the Higher Education Funding Council for England, and the Trading Standards Authority.

The proposed Fundraising Regulator would have oversight over all organisations carrying out fundraising activities, whether they be charities, not-for-profits, or agencies. It would also boast a broad range of powers.

These would include the power to register organisations, and proactively investigate breaches of regulatory standards regardless of whether a complaint has been laid.

A wider range of sanctions would also be at the regulator’s disposal. These would include the ability to ‘name and shame’ non-compliant organisations, issue ‘cease and desist’ orders, and the power to order compulsory training for fundraisers in breach of the rules.

The new regulator would be funded via a levy on fundraisers. The suggested funding framework would see a levy based upon a sliding scale, met by organisations spending more than £100,000 a year on fundraising. The estimated annual budget for the new organisation is between £2m and £2.5m.

A new ‘fundraising preference service’ is proposed, enabling people to opt out of unsolicited fundraising contacts. People could ‘opt in’ where they wish to be contacted by specific charities.

Carrying on the FRSB’s work on the ‘tick’ logo for fundraisers that have agreed to carry out their activity to the industry standards, the panel recommended the Fundraising Regulator introduce a membership badge to allow people to see the fundraiser has committed to upholding the highest standards.

The badge could be revoked in the event an organisation is found to be falling short of acceptable practice, to ensure it remains an ongoing kite mark of assurance.

Response

The FRSB is “very disappointed” that the review has called for its disestablishment.

In a statement, the regulator said it has championed the public’s interest for the past nine years. This was exemplified by its interim report delivered amidst intense scrutiny of the fundraising sector in June.

The report carried a number of recommendations for improving fundraising practice, almost all of which have been taken up by the IoF.

“The FRSB has been clear during the course of the summer that regulation of fundraising requires fundamental reform. We support the review’s overall conclusion that self-regulation in its current form has not been sufficient to identify the practices that were exposed most recently in the media and which are currently being investigated. Such practices are unacceptable and have critically damaged public trust in charities and charitable giving.

“We strongly believe that a revamped FRSB, properly resourced, would be the most viable and cost-effective way of moving forward in developing better regulation of charity fundraising.”

The FRSB will now work alongside the relevant bodies to support the establishment of the best regulatory model.

“The FRSB remains committed to ensuring that public concerns are fully met, that any approved changes for fundraising reform are swift and thorough and ultimately that public trust can be restored, enabling a vibrant future for charitable fundraising organisations across the UK.”

IoF chief executive Peter Lewis said that the institute’s members had been clear throughout the process that they wanted a stronger regulator with greater powers. They had also supported “a firm and clear expectation that all charities should have to comply with the standards that are agreed”.

The institute welcomed the review’s support for a merger between the IoF and PFRA to create a single membership body for fundraising.

However, Lewis said he expected some members to be concerned at the suggestion of placing responsibility for the code of practice with the new regulator. But many would be reassured by the suggestion of a role for the IoF on the proposed Fundraising Practice Committee.

“We will consider Sir Stuart’s recommendations in full over the next few days and look forward to playing a full and active role in supporting the new regulator to create the best possible environment for fundraising, and to continue to represent fundraisers and fundraising organisations within the proposed system,” Lewis said.

Review

The review was launched in the middle of July in response to several cases of poor fundraising practice receiving extensive coverage over a number of weeks in the national press.

Attention was drawn to fundraising following the death of 92 year old Bristol woman Olive Cooke. Cooke was a dedicated fundraiser and charity supporter, recognised as the UK’s longest serving poppy seller.

Cooke’s body was found in the Avon Gorge in May, and media reports in the wake of the incident suggested that she was overwhelmed by fundraising requests from a range of charities.

An inquest found Cooke took her own life after a long battle with depression. It found she was also suffering insomnia, and was in ill health at the time of her death.

Cooke’s family members have been quoted as saying the fundraising requests were excessive and upsetting, but not a causative factor in her death.

Next steps

In a brief statement, Minister for Civil Society Rob Wilson thanked the panel for the “wide-ranging” report.

“The recommendations represent a new approach to fundraising self-regulation,” Wilson said. “Charities need to work together to make sure vulnerable people are protected. I welcome the report as an important contribution and aim to consider fully before responding shortly.”

The review panel has called for a sector summit to take place as a matter of urgency in order to ensure a smooth transition to the new framework.

The summit would focus on formalising the necessary transitional arrangements, in particular closing down the FRSB, setting up the Fundraising Regulator, and transferring responsibility for the Code of Fundraising Practice from the IoF to the new body.

It would also put in place a process for transferring the regulatory powers of the PFRA to the Fundraising Regulator, developing Memoranda of Understanding between the Fundraising Regulator and statutory co-regulators such as the Charity Commission, and agree a timetable for the proposed merger of the IoF and the PFRA.

The summit would seek to secure a commitment from all relevant bodies to resource the transition, and secure a commitment from the fundraising charities present to register with the Fundraising Regulator once established.

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