The British Red Cross alone stands to lose £20m over the next five years if Lord Hodgson’s Charities Act review recommendation to scrap National Exemption Orders for door-to-door collections is accepted by the government.
The recommendation has generated alarm among the 43 charities that hold National Exemption Orders, and Mark Astarita, director of fundraising at the British Red Cross, described it as a “real bombshell that could cost the sector millions”.
Astarita told civilsociety.co.uk: “I hope common sense will prevail and that ministers will throw this recommendation out. Otherwise they’re going to end up facing a lot more squealing from the sector. Give it back your Lordship!”
Charities with NEOs don’t need to apply to separate local authorities for new licences every time they want to carry out a door-to-door collection, though they are supposed to notify the authorities when they plan to collect.
Most NEO-holders are owners of large charity shop chains, and usually use NEOs to make regular door-to-door clothing collections, though they are also used for cash and direct debit fundraising.
However, according to Lord Hodgson, several local authorities have told him that the NEO-holders frequently fail to let them know when collections will be occurring, which makes it very difficult to let the remaining days to smaller, local charities. This causes resentment, he said.
Also, charities are increasingly teaming up with commercial collectors and allowing them to collect under the auspices of the charity’s NEO, which goes against the spirit of the exemptions, he said.
Avalanche of paperwork
But Astarita said Hodgson had entirely underestimated the "avalanche of paperwork" that would be required if each NEO holder had to submit a separate application for each collection – for both the charities and the local authorities that would have to process hundreds of thousands of licence applications each year. “It will just seize up and no one will be able to do any collecting,” he said.
“He has totally underestimated the value of these exemption licences to the major charities. I’m not sure it would be possible to run a shops business without it.
“We at the British Red Cross estimate we will lose £20m over the next five years if this goes through.
“Hodgson should have completed a proper impact assessment to look at the costs and benefits before dropping this on us.”
BHF: devastating impact
British Heart Foundation, the UK’s biggest charity retailer, said it would have a “devastating impact”.
Mike Taylor, BHF’s retail director, said: “This is not a question of fairness but of pragmatism. Applying to local authorities for individual collections is not realistic, feasible or remotely sustainable for us.
“If the Cabinet Office moves forward with these proposals it will simply divert vital funds from life-saving research, prevention and care into form-filling and red tape.
“It’s a decision that will undoubtedly lead to delays in acquiring stock and have a devastating impact on our charity shops. Every 1 per cent reduction in house-to-house collections would cost the BHF £400,000 in lost sales.”
The Charity Retail Association said it would be writing to minister for civil society, Nick Hurd, to raise the sector’s concerns.
Hodgson: Won't be abolished until something better is in place
At this morning’s official launch of Lord Hodgson’s Charities Act review, Hodgson responded to concerns about the NEO proposal by saying: “There are concerns out there about the way that NEOs have been used and developed but I’m not saying they should be abolished until we can find a another, better way to replace them.”
