The Etherington review has been driven by a deep public unease and the sector must accept it, says Stephen Cotterill, but the period of upheaval will follow that will require fresh thinking from fundraisers.
The summer of malcontent for fundraising is coming to an end with a flurry of reports and commentary. The mother of them all – the hefty, 72-page review from Sir Stuart Etherington of the NCVO – lands today and it's tough reading for some.
A series of choice, near-to-the-knuckle phrases in the executive summary set the tone for the rest of the review: "a lack of co-ordination between regulatory bodies", "wasteful duplication of resources", "confusing and frustratingly slow decision-making processes" are but a few.
In his parting volley on deliverance of the tome, Sir Stuart adds: "The current system of self-regulation has quite clearly failed to prevent serious breaches of trust and widespread dissatisfaction."
If we are surprised by the bluntness of the wording, then we shouldn't be. This is the product of an environment that we have watched evolve over a long and tortuous summer. Media indignation over fundraising practices quickly escalated to tabloid fervour. A deep public unease about fundraising practices and charity governance was gradually unearthed. This in turn caught the imagination of a government eager to gain voter favour (or at least not lose any more of it).
There is not much point now in going over the consequent and very public roughhousing and unsightly infighting that has dragged on since, or to debate whether the sector should have apologised sooner or defended itself better. Suffice to say that the Etherington Review has been a long time coming and now it is here, the sector has to deal with it.
Will the review's recommendations be implemented in full?
Well, the review is not legislation of course, but it was commissioned by minister for civil society Rob Wilson, who also appointed Sir Stuart to lead it, so it is more than likely that a vast amount of the recommendations will be seriously considered, if not chiselled into stone. And although there remains little appetite for statutory regulation in the sector (for fear of freedom) or indeed in Downing Street (for fear of cost), amendments to the Charities Bill are currently being reviewed and there is still time for policymakers to incorporate some of what the Sir Stuart suggests. The government wants to come out of this looking proactive and for that to happen, heads, as they say, must roll.
The biggest loser if Sir Stuart is to be taken on his word is likely to be the FRSB. Despite acknowledging that it "has striven hard to represent the public interest" ultimately the review recommends that the organisation is replaced by a new fundraising regulator.
It was inevitable that one of the three sector umbrella bodies – namely the IoF, FRSB or PFRA – was going to come out of this very badly. In practice, none of them has emerged especially well, but the FRSB has come off worst.
Whether or not the right sacrificial lamb has been dragged to the chopping block is a debate that will no doubt continue for a while longer.
What does it practically mean for fundraising?
With the new regulatory body expected to be established in around six months’ time, there is a period of grace before the full effect of the review is felt and that gives a critical breathing space for fundraising teams. Already charities are reviewing their donor retention and communication processes in light of the new codes, but they face a period of uncertainty and must be mindful not to panic. In this interim, the recently enhanced IoF codes will be the point of reference and these guidelines are more restrictive. Moreover, for whatever length of time that the FRSB remains in existence, it is still under the organisation's purview to monitor them.
Although it is likely that charities will still have the option of whether to register with the new regulatory organisation once it is created or not, it will be highly unlikely that in practice they can choose whether or not to adhere to its codes.
In the short term, the transition period needs to be handled with care. In the longer term, and rather obviously, the ultimate upshot is that fundraising will become more difficult. It will be tough, particularly for small charities. But, people will still want to give to the causes that they care about and they will continue to want to do so.
It is now the job of fundraisers to think of ways to help them to do that within the new regulatory environment. One of the core problems that has brought fundraising into the critical spotlight is the preoccupation with volume. This presents an opportunity for innovation, retention and a focus on developing more rewarding donor relationships. As Sir Stuart said this morning on BBC Radio 4, "Charities need to inspire donors to give, not pressurise them into giving."
Many would agree that reform in some way or other was long overdue. If handled correctly and transparently, the new regime could go a long way to restoring a trust among the public that has been badly shaken in recent months.
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