The recent battles over the regulation of fundraising have been unfair on the FRSB and may not go far enough to prevent future scandals, says Andrew Scadding.

Four years ago I wrote this in my blog on Civil Society - ‘In a climate which I sense is veering toward hostility to fundraising charities, it is incumbent on fundraisers not only to adhere to best practice but to be seen to do so.’ Pity nobody read it. So let’s try again.

There is much that is sensible, clearly perceived and good about the Etherington report into regulating fundraising. I welcome the clear guidance on protecting the vulnerable, I welcome the equally clear advice on managing relationships with professional fundraising organisations, so far as it goes. Nobody, surely, can disagree that one fundraising regulator is better than many, and that the single regulator should have a hotline to the Charity Commission.

If bad fundraising is the result of poor governance there must be an appropriate investigation and response, up to and including (although this is not in Etherington) removal of charitable status from persistent offenders. One of the successes of the FRSB during its short life has been to build exactly such a good working relationship with the Charity Commission. Another has been Alistair McLean, who has outshone other sector spokespeople with his quiet gravitas and measured, honest responses.

But I am left uneasy. The anodyne prose of the report belies the bitter battle which has been fought behind the scenes between the FRSB and the Institute of Fundraising, which is dominated by Big Charity and is the keeper of our Codes of Practice. The fight seems to have been won by FRSB, since Etherington recommends the new regulator becomes custodian of the Codes. But the victory is Pyrrhic in the extreme, since the report also recommends the complete closure of FRSB. It will not be translated into the new body. It is described as ‘unpopular’: it is said to be ‘accountable to its members’ and criticised as ‘not fit for purpose’ because ‘it failed to prevent the summer of discontent’.

The first of these can be dismissed peremptorily. It has never been FRSB’s job to court popularity. On ‘accountability to members’ there is a little more to be said. FRSB’s finances depend on subscriptions from members who have no voting rights.

Etherington’s concern, apparently, is that FRSB is over-dependent on the subscriptions of a small number of Big Charity members who could undermine FRSB’s cashflow simply by leaving. Etherington is right to be concerned. He is wrong to recommend essentially the same but more expensive funding arrangement for the new regulator, which will consequently be even more reliant on the continuing goodwill and contributions of Big Charity. What sanctions will the new regulator have if a charity, or more likely a group of charities working in concert, simply decline to pay its levy?

The final charge, failure to prevent the summer of discontent, needs very close examination. Could FRSB have prevented the summer of discontent? Or was it ‘unfit for purpose’ because it was set up to fail from the first?

Inadequately funded (£500,000 instead of the £2,500,000 recommended for the new body) FRSB has never had the resources, the sanctions or crucially the support to prevent the abuse which so badly affected Mrs Cooke and others. Nowhere is this absence of support more obvious than in the truculent refusal of the Institute to consider even the smallest change to the Codes of Practice requested by FRSB. This matters because the FRSB is charged with ensuring compliance with those Codes. If the Codes are lax, FRSB has no power to set an acceptable standard.

It is hard to believe that Big Charity has not held onto IoF and the Codes precisely in order to prevent necessary tightening. It is little less than disgraceful that while FRSB had its considered response to the death of Mrs Cooke on its website and circulated to members within three weeks of the story breaking, including proposed Code changes, the foot-dragging Institute announced its changes only on September 21st, two days before Etherington’s report was published.

This gives me concern on two fronts. First what guarantee is there that, once the brouhaha has subsided the codes will, in fact, be handed over to the new Regulator? The Institute is already talking about a gap of twelve to eighteen months. This year, next year, sometime or never?

Second, who will benefit from closing down FRSB. Certainly not the new Regulator who will face worse financial vulnerabilities, who will be denied the benefit of knowledge, expertise and good working relationships painstakingly created over years. And who will not, it seems, have the benefit of Alistair Maclean’s sensible advocacy. He has paradoxically been our best and most credible defender throughout this dreadful summer.

With the regulatory clock reset to day 1, and so much needlessly evacuated ground to be recovered, our new regulator will be shot neatly in the foot. Not, perhaps, entirely to the displeasure of Big Charity. It is plainly essential that the knowledge base built up within FRSB is somehow transferred to the new regulator.

At the interface between charities and professional fundraising companies – be they direct marketers, telephone call centres, or street fundraisers – there is a cultural divide which will, I fear, vitiate the Etherington report. In common with earlier pundits, Etherington insists on focusing regulation on charities, laying the lions’ share of responsibility on Trustees. This is the traditional position taken by the Charity Commission.

We have had professional fundraising organisations since the 1990s, and it is time that this attitude was recognised as outdated and impractical. The regulator’s scope must extend to include professional fundraisers. No ifs, no buts. Trustees cannot be present at every street interview, they cannot listen to every phone call, and they cannot supervise every database.

There are excellent, ethical PFOs; there are those whose ethics are, shall we say, more profit related; worse, many of us who have been around a few years have met, admittedly rarely, the unmistakeably unscrupulous. There needs to be a level ethical playing field where the regulatory regime is the same for all fundraisers and all fundraising managers, irrespective of whether they are directly employed by a charity or subcontracted through a PFO. We cannot have one team of fundraisers focused on building good donor relations and others focused on buying chateaux in France, it just won’t work – proof being that it hasn’t.

Finally, I leave you this question. Are you confident that Etherington’s reforms are sufficient to prevent the abuse which affected Olive Cooke, or the other subsequently reported cases of Mr Rae and Mr Whitaker? From what I know, whilst Mr Rae may be helped by the proposed Fundraising Preference Service (because his family would have the power to sign him up to it), Mrs Cooke and Mr Whitaker probably would not. They were proud and committed charity supporters with no wish to turn off all contact (incidentally, how is the FPS to be funded? Another levy?).

To the receding echo of galloping hoofs, the IoF bolted the stable door on 21 September by banning the sale of donor details by charities. But it will take more than that to prevent donors and potential donors being bullied, harassed and pressured. It will take a change of heart amongst fundraisers of every sort. For Etherington it hangs on one short sentence: “Fundraising should be viewed and approached by charities not simply as a money raising mechanism, but most importantly as the way in which charities provide a conduit between their donors and the cause.”

I happen to agree with this wholeheartedly, but I am not convinced that it will prove any more than a pious platitude. If you believe that charity trustees in future will disregard net income and judge fundraisers by the quality of their donor care, then I can only hope you are right. But after nearly fifty years shaking my collecting-tin, I am really not going to hold my breath waiting for that particular shift.

The forces of Big Charity know they are fighting what can only ever be a long retreat against effective regulation. They are doing so with great skill, and inflicting substantial damage on what they perceive as the enemy, especially the FRSB and its successor as regulator. But the greatest casualty is public confidence in all charities and in the concept of charity. The outcome may be that in future fundraising is so restricted by regulation that we return to Flag Days and Fêtes.

It is time to call a truce for the sake of the freedom we all love, the freedom to go out and advocate our cause to a generous and warm-hearted public. Let’s make sure that we end up with regulation that works for supporters and for all charity, not just for Big Charity and PFOs.

Andrew Scadding is director of the Thai Children's Trust