New regulation governing fundraising will hit income for up to five years, a conference on charity governance heard yesterday.
Andrew O’Brien, head of policy and public affairs at CFG, said that the changes to fundraising regulation would add to the financial pressure being faced by charities.
“We have got to be realistic," he said. "There is huge fundamental change taking place not just because of regulation, but regulation will have an impact.”
He estimates that the impact of introducing the FPS could affect fundraised income for three to five years.
He also said that with less income greater demand for services there are some difficult questions to ask about "what we want the charity sector to be". And that charities will either have to find new ways to fundraise or deliver fewer services.
It will take time to rebuild trust
Ben Harrison, policy manager at the Office for Civil Society, warned fundraisers that it “will take longer to build up public trust than it has been to knock it down,” and that a “strong proactive regulator” needed to be supported by the sector.
He said: “A strong proactive regulator requires a commitment from charities to say ‘that wasn’t right.’”
Harrison said that the sector may yet face more criticism from a “legacy of poor practices” that have yet to come to light.
Get involved in FPS
Peter Lewis, chief executive of the Institute of Fundraising said that trust levels at individual charities remained high and that “donors have been incredibly loyal” so that it should be possible to “rebuild generic trust quickly”.
Lewis urged fundraisers to “get involved in designing the FPS (Fundraising Preference Service) as a service to donors and supporters and something that works for charities”.
He said the focus should be on making sure that vulnerable people are not targeted.
Lewis also said that the merger with the Public Fundraising Regulatory Association, would create a “stronger” membership organisation.
This will lead to the adoption of techniques such as mystery shopping to other areas of fundraising, such as telephone fundraising to give its members an “extra degree of confidence”.
Michael Naidu, head of individual giving and legacies at the Cystic Fibrosis Trust and former chair of the PFRA, said he was concerned that the merger would be damaging.
He said: “Why put compliance with what is in effect a trade body?”
Don't confuse governance and regulation
Bernard Jenkin warned charities not to confuse regulation and compliance issues with good governance and that is the responsibility of the chair to set the values of the organisation.
Jenkin, chair of the Public Administration and Constitutional Affairs committee (pictured), which this week published its report into fundraising and is due to publish a report into Kids Company next week, was chairing at the Westminster Social Policy Forum yesterday.
He said his committee had “spent rather too much time on charities” recently. “It has been very painful but fascinating conducting these inquiries and some of the most loved household names have been put through the mill,” he said.
Jenkin said that the “most fundamental lesson is about governance” but that there appeared to be some “confusion about what governance actually is – a lot of people think it’s about compliance”.
“Governance is a far broader term. It is not a set of technical skills, process or a collection of forms to be filled in,” he said. “It is about values and outlook.”
He said the reason that trustees needed to take responsibility was that they appoint the chief executive.
“The whole tone and outlook of any organisation is set by the chairman,” he said. And repeated that “no amount of regulation can be a substitute for good governance”.
Ian Joseph, chief executive of Trustees Unlimited, was also speaking at the event and said that part of the problem was the lack of diversity on trustee boards and that charities should “look beyond the Neolithic village”.