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MPs blame trustees in critical report into fundraising practices

MPs blame trustees in critical report into fundraising practices
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MPs blame trustees in critical report into fundraising practices6

Fundraising | Kirsty Weakley | 25 Jan 2016

MPs have said that trustees were to blame for the failures in fundraising and the Charity Commission should have a greater role in overseeing the new fundraising regulator, in a damning report published today. 

The Public Administration and Constitutional Affairs Committee launched an inquiry into fundraising practices following last summer’s scandals, and have concluded that Etherington review proposals do not go far enough to reform the sector, suggesting new amendments to the Charities Bill.

However the report also says that MPs are "not persuaded of the case" for a Fundraising Preference Service.

Bernard Jenkin MP, chair of PACAC, said that what happened in the summer “damaged the reputation of charities across the board”.

He added that: “This is the last chance for the trustees of charities, who allowed this to happen, to put their house in order. Ultimately, the responsibility rests with them. No system of regulation can substitute for effective governance by trustees.

“All the chief executives of the charities that gave oral evidence to us admitted that they did not scrutinise fundraising by sub-contractors enough. The only possible conclusion is that, by failing in this responsibility, trustees were either not competent, or wilfully blind to what was being done in their names.”

On the Charity Commission

The committee recommends the Commission be the “guarantor of the new regulatory system” making it “responsible for holding the new regulator to account for their regulation of fundraising, rather than the government resorting to its statutory powers”. It suggests amendments to the Charities (Protection and Social Investment) Bill to make this happen.

MPs suggest that the Charity Commission report to the Cabinet Office once a year to let it know how effective fundraising self-regulation is, and whether reserve powers are needed.

It also proposes that the Charity Commission should be responsible for holding the new regulator to account publicly and suggests that it hold “annual hearings on fundraising regulation and other public hearings into the workings of charities” and has suggested further amendments to the Charities Bill.

The committee also calls for all board members of the Charity Commission to be known as “Charity Commissioners” to “restore their unique status and underline that the chair and his fellow commissioners are jointly and severally liable”.

MPs said that HM Treasury and the Cabinet Office “must address the future funding” of the Commission to make sure it can take on new responsibilities.

‘We are not persuaded of the case for a new fundraising telephone preference service’

The committee said it was in a favour of a more “proactive” approach fundraising regulation but is concerned that a separate fundraising telephone preference would “duplicate the function of the existing Telephone Preference Service”.

“If a new preference service is to be introduced, the new fundraising regulator should urgently seek to discuss with the Information Commissioner how the new telephone preference service can work alongside TPS, without creating conflict and confusion in the minds of the public.

The report criticises the ICO for not being more “proactive” in the past.

MPs recommend that the Information Commissioner’s Office “should establish a memorandum of understanding with the new regulator without delay” to ensure that the sector is “aware of its obligations”.

Donations from overseas

MPs highlight the recent dispute between the Charity Commission and advocacy group Cage.

The report suggests that: “The Charity Commission and the government should consider proposals about how donations from overseas could be made notifiable through the Charity Commission so that the authorities become aware of charities in receipt of funds from potentially harmful sources.”

 

Carl Allen
27 Jan 2016

And how many Trustees are to resign, CEO's to resign or be dismissed and fundraisers to resign or be dismissed?

And what of their bonuses over the years?

Or will they all be sent to retrain?

Michael Walker-Smih
Former trustee/treasurer
26 Jan 2016

I agree with Ian Clark's comment because we all suffer from direct marketing from commercial firms and charities are not the only ones.

Unfortunately David Smith didn't go far enough in his comment because I wonder what qualification he expects. A formal qualification of one type or another or evidence of suitable experience to support the Board and the charity?

Bernard Jenkins comment "All the chief executives of the charities that gave oral evidence to us admitted that they did not scrutinise fundraising by sub-contractors enough. The only possible conclusion is that, by failing in this responsibility, trustees were either not competent, or wilfully blind to what was being done in their names.” would appear to disconnected. The CEO briefs the Chair/Board and if the CEO has not enquired deep enough into the actions of the sub-contractor/agency you can hardly call the trustees incompetent or wilfully blind. However, while there may be room for expecting more involvement from the non executive trustees especially as THEY are ultimately responsible for the charity's behavior, even in the commercial a lot of reliance is put on the executive and especially the CEO to report significant facts or decisions.

Feduptrustee
26 Jan 2016

We really need to be clear that we are talking about less than 1% of the sector. It is those trustees of that 1% ("... the trustees of charities, who allowed this to happen") who need to address the problem. Sector leaders need to put pressure on that 1% to reconnect with the values of the sector as well as putting some efforts into limiting the damage to the 99% of the sector that had no part in this (indeed looked on with horror as the chuggers and emotionally charged campaigns flooded the country). The reckless actions of the few have damaged the entire sector. How will they put this right?

David G Smith
Self Employed
Fundraiser
25 Jan 2016

Yet again Charities are under the hammer for a lack of attention to detail. What qualifications does a trustee need?
It would appear only that they need to supply their services Free of Charge and maybe have some sort of standing in the community. This is hardly a qualification for such an important position.

Is it any wonder that the public have switched off giving to Charities in the numbers they once did?

Apart from the latest discussion covering trustees, a closer look is overdue at the agency sector, who are the ones representing Charities at the face to face stage. I have said before, why do the Charities not represent themselves, they are most certainly best placed to ensure that their ethical message is presented as it should be and distorted by third hand, money motivated individuals, who care little for the Charity and more for their bank balance.

Cecile Gillard
Legal Manager, Charities and Civil Society
Burton Sweet
26 Jan 2016
Response to [David G Smith]

Amongst the volunteer charity trustees that I know, there are people who have led £12 million transformation projects in an inner city school, a cancer care specialist, several leading international film producers and photographers, the chairman of an electronics company specialising in the civil and military nuclear industries, a professor of ecology specialising in research into areas such as pollinators and the environment, a leading international specialist medical consultant/researcher/teacher in the treatment and care of patients with a particular range of medical disorders and diseases, a senior editor for a national broadcasting organisation ............... (quite a good spread of knowledge, experience, qualifications and skills being applied by them for the charities and communities they serve, I think...............).

Ian Clark
Director
Fundraising Strategy
25 Jan 2016

A helpful report that queries the suitability of the proposed Fundraising Preference Service and its associated donor reset button. It suggests that the needs of vulnerable people are of greatest importance, which has implications for direct marketing well beyond charities and fundraising.

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