Fundraising Rules and Regulations: Is Your Charity Compliant
Fundraising Rules and Regulations: Is Your Charity Compliant
Whilst news about data protection and consent has been the focus of the fundraising arena recently and charities have been busy planning for compliance with the new EU General Data Protection Regulation (GDPR), developments with the new Fundraising Regulator (‘Regulator’), which took over the regulation of charitable fundraising in July 2016, also deserve our attention.
New Requirements for Fundraising Agreements
All fundraising agreements with paid fundraisers (‘Professional Fundraisers’) and businesses that represent donations are being made to a charity (‘Commercial Participators’) must now comply with the new requirements which stem from the Charities (Protection and Social Investment) Act 2016 (‘Act’). Whilst the new requirements came into force on the 1st November 2016, the grace period of 5 months granted by the Regulator (for organisations to get their paperwork in order before they are in breach of the new law) expired on the 31st March 2017.
The new requirements are that the compulsory written agreements between charities and Professional Fundraisers and/or Commercial Participators must include extra information covering:
- The scheme for regulating fundraising or recognised fundraising standards that will apply to the Professional Fundraiser or Commercial Participator in carrying out the agreement (such as the Code of Fundraising Practice);
- How the Professional Fundraiser or Commercial Participator will protect the public, including vulnerable people, from unreasonably intrusive or persistent fundraising approaches and undue pressure to donate; and
- How charities will monitor the Professional Fundraiser’s or Commercial Participator’s compliance with these requirements.
As a result of the new requirements, any new agreements must now incorporate the above points and existing agreements will need to be amended too.
The Fundraising Levy
The Regulator has issued formal letters and invoices to more than 2000 of the largest charities (whose annual fundraising expenditure is more than £100,000) requesting payment of a fee for “regulatory services”. The levy is required to fund the Regulator and the Charity Commission has confirmed that payment of it is a proper use of charitable funds. Technically however, charities are not obliged to pay the levy as payment is voluntary and so each charity must consider, bearing in mind its own circumstances and the potential reputational consequences, whether payment of the levy is appropriate. The Minister for Civil Society has nevertheless warned charities that if insufficient voluntary payments are forthcoming, the reserve powers in the Act will be used to make payment of the levy a legal requirement.
Registration with the Fundraising Regulator
Registered charities can now apply to register with the Fundraising Regulator. Charities which have already paid the fundraising levy will already be registered and all other registered charities can pay an annual administration fee of £50. Registration means that charities have made a commitment to donors and the public as set out in the Fundraising Promise that their fundraising activities are “legal, open, honest and respectful”, and that they agree to comply with standards for fundraising in the Code of Fundraising Practice. In return, charities will receive a registration pack containing the ‘registered with’ badge in several formats which can be applied to all fundraising materials, performing a similar role to the Fundraising Standard Board’s non-redundant tick . As with payment of the levy, registration is not compulsory. Charities are therefore free to decide that registration is not appropriate but in any event trustees are still under a legal duty to ensure that all fundraising activities carried out in their charity’s name comply with the current legislation and good practice requirements and are in line with their charity’s values.
The New Fundraising Preference Service
The Regulator has made its final decisions on the development of the new Fundraising Preference Service (‘FPS’) and has announced that it is expected in the summer. It is now clear that the FPS will enable members of the public to register that they no longer want to be contacted by specific charities for fundraising purposes, by re-setting their fundraising preferences. This small reset button is a departure from the big red button which would have allowed people to opt-out of communications from all charities which was originally envisaged and could have risked individuals unwittingly blocking charities they would have otherwise been happy to support. Registration is likely to be time limited to 24 months, and the Regulator will ensure that charities are notified of people opting out, which will helpfully avoid the need to check suppression lists as was initially feared.
Some elements of the FPS will, however, continue to cause widespread concern in the sector:
- It will apply to all charity fundraising communications even if the core purpose of the communication is not to raise funds. This means that, for example, inviting people to events and including links to donations or appeals in the signature of emails will be caught.
- The final proposals have removed the opportunity for charities to check in with pre-existing supporters to make sure that they no longer wished to hear from them. Some slight comfort has since been provided by the Regulator here as they have indicated that a charity may still be able to contact a committed donor in relation to direct debits and other matters where it is in its legitimate interests to do so, and has also indicated a willingness to work with charities to resolve any problems in this area.
Rosie Brass is a senior solicitor in IBB’s charities team. For further information on charity fundraising regulations or any other charity law matter please contact our solicitors on 01895 207290 or email email@example.com.