The Information Commissioner’s Office, the Fundraising Standards Board and the Institute of Fundraising have carried out investigations into the fundraising methods used by UK charities, resulting in widespread changes to the Institute’s Code of Fundraising Practice and further calls to regulate aggressive fundraising tactics. The Cabinet Office has this month called for the appointment of a new regulator.
The investigations were launched following the tragic death of Mrs Olive Cooke in May 2015, with early reports suggesting that she took her own life due to being overwhelmed by donation requests and the subsequent revelation that the fundraising agency GoGen had been targeting dementia sufferers. The events sparked an increase in complaints made by the general public about inappropriate approaches made by charities.
The Fundraising Standards Board, which regulates complaints, released an interim report in June 2015. It focussed on the events leading up to the death of Mrs Cooke and the conclusions that could be drawn from the complaints generated in the wake of her death. The report revealed a disconcerting lack of trust from the public in fundraising practices generally and specifically, in the charities that they personally supported. It highlighted the approaches being made to vulnerable and elderly people and complaints that the Mailing and Telephone Preference Service (MTPS) was ineffective.
The Institute of Fundraising conducted its own review and responded by strengthening the Code, accepting fifteen of the sixteen proposals put forward by the FRSB. The Code represents the fundraising standards expected of Institute members and the charity sector alike. Aspects of the Code are legally binding.
The Code now makes clear that fundraisers must not make direct marketing calls to MTPS registered numbers except where donors have provided consent, ‘for the time being’, meaning donors should not be contacted because of previous dealings. Neither may ‘administrative’ calls be used as a pretext for fundraising. Clear opt-outs need to be provided. Charities in breach may be subject to enforcement action, and in extreme cases fines of up to £500,000.
Other changes to the Code prevent charities from knocking on doors where there are ‘no cold-caller’ stickers and from accepting donations from donors who lack legal capacity.
The changes are supported by the Charities (Protection and Social Investment) Bill currently being debated by Parliament which will require fundraising agreements to state how vulnerable people will be protected. Charities with an income in excess of £1m will need to publish details of their fundraising activities including the number of complaints received.
A separate Cabinet Office commissioned review of fundraising practices was released on 23rd September 2015. It suggested that the sector needs a new, more visible and effective regulator which should replace the Fundraising Standards Board, which could be regulated by parliament. It argues that management of the Code should be handed from the Institute of Fundraising to the new regulator and that a separate fundraising preference service should be established to combat unwanted communication from charities.
The Public Administration and Constitutional Affairs Committee are currently hearing evidence with regard to their own review into fundraising practices.
The recent changes to the Code are likely to safeguard donors, particularly those that are vulnerable. More stringent regulation may follow as a result of the Cabinet Office and Committee reviews. There are concerns that this may impact on charitable giving and reduce income received by the sector.
Given that the overall charity regulator, the Charity Commission has seen a real terms budget cut of approximately 50% in the last eight years it is unclear how a new regulator might be funded.