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.”