EU rules which will require donors to opt in to fundraising communications are “a bigger issue” for charities than the Fundraising Preference Service, Sir Stuart Etherington, chief executive of NCVO, has said in an interview published today.
Etherington, who was interviewed at length for the relaunched Governance and Leadership magazine, also said that the fundraising crisis was inevitable due to “crude” and “industrial scale” fundraising techniques, and because no charity was thinking about the sector as a whole.
He said charities needed to be more proactive at improving their reputation and countering criticism in the media, but that the sector needed to get its own house in order first.
And he hinted at a possible date for his retirement.
Fundraising Preference Service
Etherington last year conducted a review of fundraising regulation which proposed a new Fundraising Regulator, as well as a Fundraising Preference Service which would allow donors to opt out of all future communications from charities.
The FPS has been heavily criticised by fundraising gurus as a significant threat to income.
Etherington defended the need for the FPS and said that charities had missed the point.
He said that changes in EU law mean charities will have to obtain “unambiguous consent” to contact individuals by 2018. Etherington said he did not believe most charities currently had this consent to contact their donors, and that this was the real threat to fundraising income.
“I think there has been too much focus on the FPS, and opt-in is a bigger issue,” he said. “I wonder how many charities have explicit consent. But if they haven’t got it, they will have to get it.”
Fundraising think tank Rogare originally said the FPS would cost charities £2bn. But Etherington says he does not know how the figures were worked out, and doubts that they are accurate.
“Inevitably those figures are based on a series of assumptions,” he says. “But are those assumptions accurate?”
He said some charities had questioned whether it was fair to have an FPS which singled out charity marketing.
“Charities are complaining that the rules hold them to a higher standard than double-glazing salesmen,” he said. “Charities should have higher standards. They are values-driven organisations and should act in a values-driven way. They have a public responsibility to act to the highest standards and ethics. That’s why charities get tax breaks and double-glazing salesmen don’t.”
‘This was coming’
Etherington also said that the behaviour of charities had made a crisis in fundraising inevitable.
“The thing to say is that this was coming,” he said. “If it wasn’t Olive Cooke, it would have been someone else.”
He said charity marketing techniques were basic and targeted the same people over and over again.
“In agencies the campaigns were often about quite marginal increases in donations,” he said. “They weren’t able to make multiple offers – volunteering, support for campaigns. It was all about cash. They weren’t sophisticated; techniques were crude compared to other telemarketing sectors.
“It’s not surprising that industrial scale fundraising began to have an impact. No one was thinking of the consequences of this. No individual charity was thinking about the consequences for the sector as a whole. There was an inability to grasp the implications for all charities.”
He said it was necessary for NCVO to step in.
“Charities have been overfishing,” he says. “If we hadn’t acted, sooner or later they would have run out of fish.”
All charities, he said, seem to have actively pursued the same small group of donors – women over sixty with higher disposable income.
“Those women were getting more and more mail and giving less and less,” he says. “No one was seeing them as supporters and building relationships.”
Think about the whole sector
Etherington also challenged those who said it was not fair to apply special treatment to charities, and those who said that fundraising techniques were justified if they raised more to help beneficiaries.
“I don’t think the end justifies the means,” he said. “A lot of people use that as justification but in the end the sector is supposed to have ethics and values, and those don’t just apply when dealing with beneficiaries, but also with supporters. I think a lot of charities lost track of the fact they were dealing with supporters. They were people who wanted to help and were taken advantage of.”
And he said no charity had thought of the cumulative impact of the sector’s behaviour.
“This is a general problem in the charity sector,” he said. “Charities see themselves as individual organisations, but the public view the sector as a homogenous unit. We understand that charities are very variable, and that there are a lot of charities who resent being tarred with the same brush as the worst offenders. But the public expect charities to work together and hold each other to account.”
Leadership and reputation
Etherington said he has been accused of disloyalty by some who say his role is to defend charities from outside criticism. But he says charities should be cautious about this attitude.
“The sector has come under various attacks, more than I can remember in 21 years. Some people feel that you should defend against the attack at all costs. My view is that you should act if the sector is being criticised in an indefensible way. If they are raising reasonable points, our role at NCVO is to encourage the sector to change.
“My job is a leadership job. It’s not just to represent and respond. My message to the critics is ‘Who would you have liked to do it?’”
Lobbying and campaigning
Etherington said the sector needs to do more to defend itself from media attacks, and also start taking proactive steps to improve its image. But he also said the sector needs to put its own house in order first.
“I don’t think we’ve done enough to defend ourselves,” he says. “But there a timing issue here. It’s extremely difficult to get on the front foot when you’re putting out fires. If the media raise an issue and they have a fair point, our job is to fix the problem.”
Sometimes, he says, there is no problem to be fixed, as with a critical report by the True and Fair Foundation last year, which said the sector was not spending enough “on the cause”. Etherington says following the True and Fair report NCVO was robust in the sector’s defence, and won a clarification from the Telegraph.
“If you get something which is complete crap, you have to go at them,” he says.
Etherington said his charity has worked effectively with Acevo on campaigning, and that the two organisations’ relationship has improved.
“We’ve realised we have to work together to deal with the issues facing the sector,” he said.
But he said the two bodies still have different lobbying philosophies.
He said he favoured an “inside track” approach.
“People are critical that we do too much behind closed doors,” he said. “But that’s a much better way of solving it than going on the Today Programme. If you represent charities and you’re on the Today Programme, you’ve sort of failed.”
Etherington also hinted at retirement. He said the NCVO celebrates its centenary in 2019, when he will celebrate his 64th birthday and his 25th year in the job.
“It feels like the world is trying to tell me something,” he said.