A series of damaging newspaper stories about fundraising prompted a proposed overhaul of how it is regulated. Ian Allsop looks back on how Civil Society News reported developments.
It all started in May 2015 when the newspapers carried front pages telling the story of Olive Cooke, a 92-year-old poppy seller and lifelong charity volunteer and donor who had apparently committed suicide. The papers blamed the fact that she had received more than 260 letters a month from charities asking for money.
Her family were moved to deny allegations that charities had caused her death, but said they felt fundraising reform was essential. Prime Minister David Cameron, who had given Cooke a Point of Light award for volunteering, called on the Fundraising Standards Board to launch an investigation.
It quickly became clear that the story would not fade away, and that the public was genuinely concerned about fundraisers who put too much pressure on individuals to donate. The Daily Mail and The Sun, in particular, were moved to send undercover reporters to investigate fundraising practices, and The Sun unearthed the question of chief executive pay in order to launch a fresh attack on the sector. Other tabloids found new instances of donors being ‘hounded’ by charities. Broadsheet newspapers, while avoiding the harsher criticisms, nonetheless published their own calls for the reform of fundraising regulation. The Daily Mail and some peers called for an ‘Olive’s Law’ to protect donors.
Proposed regulation
Meanwhile the government was paying attention. Chris Grayling, the leader of the House of Commons, promised that government would act to ensure fundraisers were properly regulated, and Rob Wilson, minister for civil society, summoned the leaders of the Institute of Fundraising and the Public Fundraising Regulatory Association, as well as the FRSB, to explain to him what action they were taking.
The three bodies produced a joint statement promising “more robust” regulation, including an independent chair for the IoF Standards Committee, which sets the Code of Fundraising Practice. The FRSB promised an interim report within weeks, and delivered on 9 June. It revealed it had had 384 complaints since the death of Olive Cooke, and delivered a wide-ranging report that had eight separate recommendations to reform the Code.
Responses from the sector were mixed, with some fundraisers saying the proposals went too far. Former IoF chair Mark Astarita said that it was time for fundraisers to have an effective licensing regime, but said that some of the FRSB’s suggestions did not solve the problems they were intended to address. Fundraising think tank Rogare also said the proposals did not “strike the right balance” and promised to develop its own theory of fundraising ethics.
Shawcross and Etherington
It was at this point that figures from elsewhere in the sector stepped into the debate. William Shawcross, chair of the Charity Commission, said that the Olive Cooke affair was a “crisis” for the sector, and was rebuked by Sir Stephen Bubb, chief executive of Acevo, for undermining charities. A few days later Sir Stuart Etherington, chief executive of NCVO, said that the responsibility for setting the Code should be taken away from the IoF, or that at the very least there should be “clear blue water” between the IoF and its Standards Committee. Peter Lewis, chief executive of the IoF, responded that Etherington’s proposals would not address the public’s concerns. Lewis also revealed that Rob Wilson had written to the IoF with his own proposals for the reform of fundraising, including a requirement for all data-sharing to be “opt-in”, and that the IoF was considering these as well.
Despite a move towards reform, neither the tabloid newspapers nor Parliamentarians were content to let the matter rest and in July the story gained new life when the Daily Mail published the results of an investigation of telephone fundraising agency GoGen. The paper claimed to have evidence that the agency targeted dementia sufferers and used a loophole to get around the rules of the Telephone Preference Service. It singled out four fundraising directors for personal criticism. Two weeks later, after a period of extreme pressure, fundraising agency GoGen was forced to close its doors, with the loss of 485 jobs. The agency had lost all its major clients and was unable to continue. Shortly afterwards a similar fate befell R Fundraising, the Dunfermline-based agency, which was bought in January this year by the Fundraising Initiatives Group. The directors of Fundraising Initiatives said the main factor was not loss of clients, but the overall state of the sector.
Government acts on regulation
Even before the closure of GoGen, the government had decided to act. New legislation was introduced as part of the Charities (Protection and Social Investment) Bill, requiring charities to account for their fundraising practices, including reporting how many complaints they receive.
Wilson said the government would legislate, if necessary, to stop “the goodwill of the public haemorrhaging away” from the charity sector. Etherington was asked to head up a review of fundraising self-regulation. In Scotland, SCVO was asked to do the same job. Meanwhile the Public Administration and Constitutional Affairs Committee, the Commons committee which scrutinises charity regulation, had already opened its own investigation. Bernard Jenkin, chair of the committee, called charity fundraising practices “disgusting”.
New regulator for fundraising
Etherington’s review of fundraising regulation published In September recommended wholesale change. It said that the Fundraising Standards Board should be replaced with a new regulator and the Institute of Fundraising should be stripped of all responsibility for setting the standards which govern fundraisers. It recommended creating a Fundraising Regulator, which would be “a more powerful body with the public interest at its heart, which can ensure that vulnerable people are protected”. It said the new regulator should set the rules which govern fundraising, and should have jurisdiction over all fundraisers, whether they sign up or not.
The review said that “the new regulator should set its own standards for fundraising good practice. Currently, the FRSB adjudicates against standards set by fundraisers themselves via their trade body, the IoF. The panel believe this is an inappropriate arrangement which is not in the public interest and has damaged fundraising regulation.”
The review also called for the regulator to be much better funded, with all charities that spend more than £100,000 a year on fundraising from the public expected to contribute. The proposed Fundraising Regulator would have strong links with the Charity Commission and Information Commissioner’s office. “The current approach to self-regulation is no longer fit for purpose,” the report said. “Self-regulation has lost the confidence of both fundraising organisations and the public.”
Fundraising Preference Service proposal comes under fire
Wilson confirmed he will accept in full all the recommendations of the Etherington Review. However, NCVO was forced to defend proposals for a Fundraising Preference Service (FPS), which would allow donors to opt out of all communications. Fundraisers have said that together with a revamped TPS, this will make it extremely hard to communicate with supporters, even those who want to receive information.
At a hearing of the PACAC, the information commissioner said he was also not in favour of the FPS because it would not work with the existing TPS. He also said his office had warned eight charities last year about potential breaches of the TPS and criticised the IoF for its slow response. His office met with charities and told them they must follow the TPS much more strictly than previously. The commissioner was critical of the IoF and major charities for their attitude towards the TPS.
Chairs from some of the largest fundraising charities told the committee they intended to scale back telephone fundraising and had sacked fundraising agencies after discovering the extent of public disquiet. They also said they had strengthened trustee committees overseeing fundraising.
Lord Grade appointed first chair of Fundraising Regulator
The government appointed Michael Grade as the first chair of the new Fundraising Regulator in November. Lord Grade of Yarmouth is a former chair of the BBC and chief executive of Channel 4, and will now take steps to appoint a board and chief executive for the regulator. Grade’s appointment followed considerable debate over the powers and priorities of the new regulator. The regulator will be backed by reserve powers in the Charities (Protection and Social Investment) Bill, which is currently making its way through the Commons, effectively allowing the government to force charities to sign up and fund the regulator if they refuse to do so voluntarily.
Fundraising summit
A summit took place in early December to discuss the future of the regulator and to update charities on the Fundraising Preference Service (FPS), the most controversial proposal put forward by Etherington. The think tank Rogare claimed it would cost the sector £2bn a year and conducted a survey which found that three-quarters of fundraisers oppose it.
There was criticism of the way the summit meeting had been planned. Several observers claimed that there has been too much emphasis on large charities – which were asked by the IoF to pledge funds to support the new regulator – and argued that proposals which increase the cost of data processing are more likely to fall disproportionately on small charities.
At the summit Lord Grade said the new regulator and FPS must be up and running by end of 2016. Grade also announced George Kidd, chair of the Direct Marketing Association, as the leader of the working group which will establish how to implement the Fundraising Preference Service.
On the FPS, Kidd said he envisaged it working in three ways: as a “safe haven for people who need it”, a “tool for people to manage the way they speak to charities”, and “a refuge for people who feel that fundraising has become intolerable”. Kidd acknowledged the sector’s concerns that the FPS might wipe out “existing relationships”. He also said that while he is “instinctively an opt-out person” the sector has to prove that “if opt-in is wrong, we must prove that opt-out is right”.
Meanwhile, Wilson said the charity sector should “calm down” about the introduction of FPS. He said he did not envisage the FPS becoming the “default way” that donors dealt with charities, and that the FPS was unlikely to have the negative impact many believed. Wilson also warned that the government had come close to introducing statutory regulation of fundraising, and that the decision had been “on a knife edge”. He said he had “fought hard” to ensure that charities were given one more opportunity for self-regulation.
Ian Allsop is a freelance journalist and editor
