Compliance on disclosure could appear costly

Fundraising | Gemma Ware | 16 Apr 2008

Charities that plan to abide strictly by new government guidance on professional fundraising could appear less cost-effective to the public than charities who do the bare minimum, according to a leading charity lawyer.

Rosamund McCarthy, partner at Bates Wells & Braithwaite, said conscientious charities could suffer if they adhered to the draft guidance on professional fundraising and commercial participation, published in February by the Office of the Third Sector.

McCarthy said there had not been “much appetite for prosecution” under the existing 1992 Charities Act regime governing fundraising disclosure, but that the effectiveness of the new rules would rest on how well they are enforced.

“If, like the existing regime, it doesn’t become enforced, there could be a situation where those people who sail much closer to the wind could appear to the consumer to be more cost-efficient. It’s going to put charities in a difficult position, because you may be penalised for complying,” she said.

“You could have a situation in which you have a charity which is actually very wasteful of resources but uses volunteers, and could be seen to be more efficient.”

The draft guidance is currently out for consultation with the sector until the end of May but covers legislation coming into effect on 1 April.

McCarthy said there was particular confusion over what defined an appeal in the guidance, particularly in the case of ongoing fundraising campaigns. She said if the nature of the appeal changed over time this could affect the ‘notifiable amount’ fundraisers will be required to declare detailing how much of each donation goes to the charity.

This could also be “misleading for the punter” particularly in the case of a weekly, monthly or a regional appeal where the ‘notifiable amount’ would vary, but might be part of a larger campaign, she said.

Anne-Marie Piper, partner at Farrer & Co, said that the complexity of the disclosure statements could make them meaningless. “The main problem is that it can’t be calculated and people are just plucking a figure out of thin air,” she said.

Who's Who: Gemma Ware

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