Just 40 per cent of charities are fully compliant with fundraising reporting requirements as set out by the Fundraising Regulator, new figures have shown.
Under the Charities Act, charities are required to provide a statement on fundraising in their annual reports, prompting charities to show how they are protecting donors and the public from poor fundraising practices.
But research by the regulator has found 60 per cent of charities are not fully compliant with these requirements and are providing inadequate fundraising statements in their annual reports.
The regulator randomly selected 106 annual reports filed with the Charity Commission, all of which represented a cross section of different sized charities that spend more than £100,000 on fundraising.
It reviewed each fundraising statement, evaluating strengths and weaknesses based on how well it met the criteria of the Act.
However, its analysis found many charities provided limited detail about how fundraising campaigns are run and managed, including who carries out the work. They also showed a common failure to demonstrate how the Code of Fundraising Practice is used to guide their work.
Furthermore, it revealed a common lack of thorough description about fundraising activities, an omission of the number of complaints received and limited explanation of how vulnerable people are protected in the organisations’ fundraising work.
Following the findings, the regulator has published new guidance to ensure charities of all sizes and fundraising budgets are able to meet the Act’s requirements.
The guidance includes information on what the statement should consist of, examples of a fully compliant report, expectations from the Charity Commission and what charities can expect from auditors and independent examiners.
The regulator said it “strongly encourages” all charities to follow this guidance in order to comply with the Charity Commission’s CC20 guidance and the law.
“Although our review has highlighted a low level of compliance with The Charities Act 2016 in terms of fundraising statements, we recognise that this is the first year of reporting in this manner. We are committed to working with charities, especially those with lower fundraising budgets, to promote better practice in reporting and the importance of providing a comprehensive statement,” the regulator’s chair, Lord Toby Harris said.
Fundraising Regulator chief executive, Gerald Oppenheim added: “This first year of reporting gives us valuable insight into common issues arising in charities’ fundraising statements. This is an important opportunity for the sector to come together to ensure that everyone is being held accountable to increase standards of reporting across the board.”