Regulator to clarify its requirements on paying fundraisers in code update

11 Jun 2024 News

Fundraising Regulator logo

The Fundraising Regulator has said it plans to clarify its requirements around how fundraisers are paid when it consults on its redrafted code of practice for a final time later this year. 

In an update this week, the regulator said that its three internal committees have approved its proposals to clarify its requirements on paying fundraisers after a public consultation last year

Currently, its Code of Fundraising Practice states that charities and third-party fundraisers should not use commission-based payments unless they have “explored and exhausted all other sources of fundraising investment”.

If a payment-by results model is used, it says a charity or its senior executives should have approval over such payments or there should be “measures in place to make sure excessive payments are not allowed”. 

But in its recently published first-ever market-inquiry report, the regulator said that performance-related pay “can be a success both financially and in regard to compliance”.

Update on the code review process

The regulator’s policy manager Conor Gibson said in the update that its committees have approved of its proposals to make the code more focused on principles-based rules.

“Protections for the public that appear in the current code will be kept, but a principles-based approach will allow for wider interpretation in the context of new fundraising approaches,” he wrote.

“This includes changes (such as in technology or society as a whole) that have happened since the last full code review in 2019.”

The committees also approved its suggestion to replace rules where the Fundraising Regulator is not the lead regulator with links to external laws and guidance. 

Its public consultation on the code last year received responses from more than 150 organisations and over 4,500 comments on its proposals, with “a high level of support” for streamlining the code, moving to principle-based rules and replacing some rules with signposting.

Final public consultation in September

Gibson wrote that the regulator has completed its latest draft of the code and is seeking legal advice ahead of a final eight-week public consultation scheduled for September.

Following this final consultation and after its proposals are approved by its board, the regulator plans to publish its refreshed code in 2025.

After the new code is published, charities will have a “six-month grace period” to update their processes, during which time the regulator’s casework team will not investigate complaints about the new rules.

The regulator also plans to produce guidance to support organisations in implementing the new code, on areas such as due diligence, monitoring partnerships and documenting decisions.

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