New safeguards may be needed to protect fundraisers due to the recent deregulation of commission-based pay, a fundraising think tank has warned.
Last year, the Fundraising Regulator revised its code of practice for charities not to pay by commission in most cases with a broader direction to “give appropriate consideration” to which payment methods they choose.
Published today, Rogare’s report argues that the new guidance means many ethical arguments against paying fundraisers by commission are now “flawed”.
It says arguments for commission-based pay include that it could result in more money being raised for charitable causes, and it enables smaller charities with little budget to compete with larger organisations.
However, the report warns that commission-based pay could harm fundraisers’ psychological wellbeing and calls for safeguards to be introduced.
Overall, the think tank has proposed 12 safeguards to protect fundraisers and other stakeholders if commission is to be paid, including that it should always be disclosed to donors.
Its report says that commission should never be part of the pay package for salaried fundraising staff nor form the sole form of remuneration for any fundraisers.
Rogare recommended that commission payments should always be capped and that they should never be due on unsolicited donations, such as windfall gifts.
It also suggested that professional institutes could implement a permitting scheme that would give permission to organisations to pay commission to fundraisers, contingent on these safeguards being in place.
‘Conversation on ethics of commission payments long overdue’
Heather Hill, one of the paper’s co-authors, said the sector “needs to do better” than solely relying on the fundraising code to explain its decision whether or not to pay by commission.
She said doing so “fails to provide a rationale for the reason the code has taken such a position, and it fails to address situations for which there is no applicable code”.
“This conversation is long overdue and we are pleased to offer this paper as a way of jumpstarting critical thinking around the issue,” she added.
“But we would like to make it clear that we are neither arguing for not against commission-based pay for fundraisers, only evaluating the ethical arguments for and against.”
A spokesperson from the Fundraising Regulator said: “Charities should ensure that fundraisers collecting on their behalf are remunerated in a way that reflects the values of the charity and the skillset of the fundraiser.
“While the Fundraising Regulator is not prescriptive about payment models, we think that fundraisers should receive a living wage for their work.
“As with all employers, charities are expected to comply with all relevant employment laws. Additionally, they should monitor their fundraising partners to ensure compliance with the Code of Fundraising Practice, legal obligations, and their own expectations.”
