Who: the cross party review of fundraising regulation for the Minister for Civil Society consisting of Sir Stuart Etherington (chair), Lord Leigh of Hurley, Baroness Pitkeathley, Lord Wallace of Saltaire .
When: 22 September 2015
Law stated as at: 6 October 2015
The Etherington report (the “Report”) was commissioned in response to the well-publicised lack of public confidence in charities’ fundraising methods, highlighted in numerous press reports over the past year. The committee was chaired by Sir Stuart Etherington and took evidence between July and September in 2015 before publishing the Report on 22 September 2015. It was argued by many respondents that the balance had shifted between the public’s right to be left alone and a charity’s right to ask.
The Report concludes that the current self-regulatory regime is not working as the system is unnecessarily complex. Although stakeholders are not pushing for state regulation, there is an understanding that statutory involvement, through a hybrid model involving statutory bodies, would be useful. The Report also identified demand for more effective sanctions to ensure compliance.
The key recommendations in the Report are based around a “three lines of defence” model: namely trustees, a new fundraising regulator and statutory industry regulators across the UK. Amongst the Report’s findings were:
- Importance is placed on the role of trustees and the importance of their knowing about the fundraising activities taking place in their name.
- A single new regulator should be created: the Fundraising Regulator. The Report proposes that the current self-regulatory body, the Fundraising Standards Board (“FRSB”) was too close to the industry it regulated and should be replaced with the Fundraising Regulator (“FR”). The FR would be responsible for the regulation of all fundraisers in the UK. The FR should be accountable to the Public Administration and Constitutional Affairs Committee (PACAC), who would review progress made over the first 18 months.
- The FR should be funded by a levy on all fundraising expenditure for organisations reporting an annual expenditure of £100,000 or more. The levy would be calculated on a sliding scale, depending on an entity’s overall spend on fundraising.
- The FR should be given the ability to impose a range of sanctions including naming and shaming, cease and desist orders, compulsory training and compulsory clearance of future campaigns. The Report stopped short of recommending fines as they could harm donors and beneficiaries. The sanctions would then be backed up by the industry regulators in any area where the issues fell within their remit.
- The Report states that the existing PFRA rulebook should be merged with the Code of Fundraising Practice into a new Code of Practice and the Fundraising Promise should be abolished. The Code of Practice should be set and enforced by the FR.
- Fundraisers should be able to register with the FR and the FRSB “tick” could be used as a token of membership.
- The Report recommends that a Fundraising Preference Service is established by the FR to enable individuals to register their lack of consent to being contacted for fundraising purposes.
- The Report also stresses the importance of collaboration between the Institute of Fundraising and Public Fundraising Regulatory Association and even recommends that a merger of the two may be appropriate.
Why this matters:
The Minister for Civil Society, Rob Wilson, has announced that the government has accepted the recommendations in the Report in full. A period of further consultations will now follow to finalise the detail of these recommendations.
These recommendations are not the only changes of fundraising regulation on the cards at present; amendments to the Charities (Protection and Social Investment) Bill are in Parliament and will require trustees of large charities, “to be more accountable and transparent about their fundraising by reporting details in their annual reports, including whether agencies are used and how the public and vulnerable people are protected from undue pressure and poor practice”. The regulation of fundraising appears to be a current hot topic and it will be interesting to see how the Report’s recommendations are translated into a regulatory framework.