Working to the highest fundraising standards – the regulator’s view

Fundraising Regulator CEO Stephen Dunmore reflects on its first year of operation, and the challenges and priorities in giving donors an improved experience of fundraising

Since its inception just over a year ago, the Fundraising Regulator has worked hard to establish constructive and positive relationships with the sector.

That doesn’t mean – nor should it – that we will always agree. But engagement is a key part of the relationship that any regulator should have with the sector it regulates.

How we engage as a regulator

Engagement should be open, honest, courteous and a two-way street. But it should not become cosy – the Fundraising Regulator must be independent, neither friend nor enemy, and must not forget its commitment to encourage excellent fundraising practice for the benefit of donors and the public generally.

Some charities, reluctant to pay the levy, have asked “what’s in it for us?”, when the first question should be “what’s in it for donors?” An improved experience of fundraising for donors will help to restore public confidence and ultimately benefit charities and the social purposes they are committed to funding and delivering.

Regulation funded for the sector, by the sector

The first year of our voluntary levy ended on 31 August and charities’ response to the levy and registration has demonstrated a real commitment to improving fundraising culture. The list of payers and non-payers that we published recently, in the interest of fairness and transparency, shows that, with very few exceptions, larger charities within the top tiers of the levy (based on fundraising expenditure) and many smaller charities have paid. In all, over 1,400 charities are now on board, with around 100 still in negotiation. 879 charities outside the levy have also registered. All of that is good news.

I will not pretend, however, that rolling out the levy has been easy. Some smaller fundraising charities – although they are not small, since the threshold for inclusion in the levy is fundraising expenditure of £100k per annum – seem blissfully unaware of the Etherington Review, the creation of the Fundraising Regulator, the Charity Commission’s CC20 guidance and the fundraising requirements in the 2016 Charities Act. 100 charities have not responded to any of our levy communications. Our chair Michael Grade has described this as unprofessional and he is right.

Making the case

We have spent a great deal of time, since our levy consultation in summer 2016, negotiating levy payments – time and resources which could have perhaps been better spent on regulation. Where charities decline to pay, we open a dialogue to try and persuade them of the benefits of participating. Many charities respond seeking clarification or challenging the level of payment; again, we engage with them to reach a solution. We have also worked with a range of umbrella bodies to get the messages across to their membership. Understandably, engagement remains a challenge where charities do not even respond to our communications.

We have also built excellent working relations, based on Memorandums of Understanding, with fellow regulators, in particular the Charity Commission, its counterparts in Northern Ireland and Scotland, HEFCE and the Information Commissioner. We would, of course, always be ready as necessary to raise issues of concern with our fellow regulators, but we would do that behind closed doors.

Data protection and consent – the big challenge

On the crucial issue of data protection, consents and the forthcoming GDPR, the Charity Commission, Information Commissioner and Fundraising Regulator have presented a united front. There has been a sea-change in charities’ approach to this key area since early 2016.

Charities, not least larger charities, are now very focused on getting it right, in terms of handling the personal data of donors before the GDPR arrives in May 2018. The 13 charities issued with penalty notice and fines by the Information Commissioner have all responded positively and, in dialogue with the Fundraising Regulator and the Charity Commission, put in place remedial action plans.

Our priorities in 2017/18

Over the next few months, we will be updating the Code of Fundraising Practice to reflect more fully and accurately data protection and consent requirements and we will also amend, in the light of further advice from the Information Commissioner, our comprehensive guidance on the handling of personal information.

Other priorities for the year ahead are to continue to handle complaints from the public (running at an average of 80 per month); to share learning from the investigation of those complaints; to reorganise and rationalise the Code of Fundraising Practice so that it is more accessible to charities and the public; to continue to engage with the sector and not least umbrella bodies; and to operate and monitor the Fundraising Preference Service, raising our profile with the public, particularly in Wales and Northern Ireland.

In the light of recent negative publicity about on-line fundraising platforms in the wake of the London and Manchester terrorist attacks and the disaster at Grenfell Tower, a new priority will be to engage, in collaboration with the Charity Commission, with the main platform operators, looking at how the giving public can be better protected when donating to such sites and ways in which we can be assured that donations to crowdfunding sites, where no charity is involved, reach the intended beneficiaries.

Ultimately, how charities choose to respond to the call of voluntary regulation will determine the fundraising environment in which they operate. Will this be a system based on statutory requirements imposed from outside of the sector or one where charities take responsibility for their own future and play a central role in developing the fundraising standards they work to?

We will continue to make the case for the latter – the outcome we believe is best for the public and best for charities.