Fundraising self-regulation in NI - Time for Change?

Reasons behind the changing face of fundraising self-regulation

In 2015 negative media coverage regarding “aggressive” fundraising tactics by charities and the high profile case of 92 year old poppy seller Olive Cooke, caused some media outlets and sector commentators to question whether charity fundraising was in crisis. Additionally, other issues such as charities’ use of data, cold calling and selling on of contact details continued to make media headlines.

In addition to negative media coverage, various pieces of research also bore out the need for more robust fundraising self-regulation. For example,  nfpSynergy research relating to public trust in charities and other public institutions showed that 2015 negative media coverage and newspaper revelations had taken their toll, with trust in charities falling from 53% in Spring 15 to 48% in Autumn 2015 and a nine year low.  In September 2015, a UK Charities Aid Foundation (CAF) survey also found that “public trust in charities is under threat” with only 57% of respondents agreeing that charities are trustworthy and act in the public interest, far lower than the 72% recorded by the Charity Commission for England and Wales in 2014.  In June 2016 research commissioned by the Charity Commission for England and Wales demonstrated that trust in charities had fallen from 6.7 out of 10 in 2014 to 5.7.

A November 2015 Mori poll commissioned by SCVO of more than 1,000 people in Scotland showed that levels of public trust in charities remained relatively high in Scotland: 73% of people agreed that they felt confident donating to charity and 82% trusted charities and believed they acted in the public interest (compared to 57% in England and Wales.)  However, the news in Scotland was not all good.  Although 54% of people said their levels of trust of charities had remained the same and 16% said their trust in charities had actually increased in the last year, 28% said their trust in charities had dropped.  41% also said that negative media stories had affected their trust in charities.

On 6th September 2016 the Long Gallery at Stormont saw the launch of Charity Commission for Northern Ireland (CCNI) research into public trust and confidence in NI charities.  This painted a similar picture to that of Scotland.  Whilst 66% of the public said that their trust and confidence in charities had stayed the same over the last two years, 26% stated that it had decreased and 66% felt that some fundraising methods used by charities made people “uncomfortable”.

What exactly is changing?

Up until July 2016, standards of conduct for fundraising by charities across the UK were set and enforced through a system of self-regulation involving three main bodies.  These were:

1. The Institute of Fundraising (IoF)
2. The Fundraising Standards Board (FRSB)
3. The Public Fundraising Association (PFRA)

It was voluntary for charities to subscribe as members of these organisations and be regulated through adherence to their standards.

Charities were encouraged to sign up to and follow a Code of Fundraising Practice (“The Code”).  “The Code” outlined the standards expected of all charitable fundraising organisations across the UK. The standards themselves were developed by the fundraising community through the work of the Institute of Fundraising (IoF) and Public Fundraising Association (PFRA). 

The IoF is a professional membership body funded through fees and payment for services provided to members.  There are over 70 members of the IoF in Northern Ireland.  The Fundraising Standards Board (FRSB) was set up following the introduction of the Charities Act 2006 in England and Wales as a voluntary membership body that monitored and ruled on public complaints about the conduct of charities’ fundraising that remained unresolved after consideration by the member charity concerned.   The FRSB had over 1700 members and 50% of all voluntary income in the UK was raised by charities that were regulated by the FRSB.  In Northern Ireland the FRSB had approximately just 24 members.

The Fundraising Promise was a key part of the FRSB scheme. It outlined how FRSB members would behave when carrying out their fundraising and aimed to ensure that fundraising was legal, honest, open, transparent and accountable.  The FRSB “give with confidence” tick was the symbol used to demonstrate to the public that charities and suppliers were committed to high standards in fundraising

The Public Fundraising Association (PFRA) oversaw door to door and street fundraising where the fundraiser asked someone to make a regular donation to the charity by direct debit. The Public Fundraising Association had 168 members across the UK.

What is the current situation regarding fundraising self-regulation in NI?

The Charities Act (Northern Ireland) 2008 created the CCNI (Charity Commission for Northern Ireland) and set out legislative provisions for the statutory – or compulsory - regulation of elements of charity fundraising.  At present these provisions have not been brought into force and the system of self-regulation of charity fundraising has been maintained.

With the closure of FRSB and the changing role of PRFA (and its proposed merger with IoF) the main fundraising self-regulation bodies have already gone. NI now has the opportunity to choose a more effective system of fundraising self-regulation.  

Robust and effective voluntary regulation will aim to enable our sector to:

• Protect its integrity
• Increase public confidence and trust by demonstrating that we are open and accountable and treat ethics in fundraising seriously
• Demonstrate that we both respect and listen to our donors’ views and aim to meet their needs
• Promote best practice in fundraising and ensure that fundraising is seen as an integral part of good governance.
• Ensure that our fundraising efforts are more effective and sustainable in the long-term

We also want the situation for the NI public to be equitable to the rest of the UK having a body to take their complaints to should they not be satisfied with the charity and charity trustees response. Our donors are very important to the sector and deserve to have a transparent and reliable process to deal with their complaints.

Fundraising self-regulation in the context of good governance 

Ensuring that a charity’s fundraising is well regulated is already part of the increasingly diverse role of trustees and they have a decisive role to play in regulating fundraising.  Whilst trustees’ decision-making may benefit greatly from being informed through their own fundraising staff and volunteers, ultimately, the onus is on trustees themselves to ensure that:

• all funds which are raised are properly accounted for
• donations are only spent on the purposes for which they were raised – there is a requirement on the charity to have a robust process for managing restricted and unrestricted funds
• donations should only be deployed on activity in line with the charity’s constitution
• all relevant legal requirements and statutory guidance are complied with
• charity’s fundraising processes are regularly reviewed to ensure compliance with the Code of Fundraising Practice, and not simply that targets have been met.
• senior fundraising staff regularly attend and update trustee meetings
• fundraising activity is included on the charity’s risk register or when considering risk management
• if using a professional agency to raise funds, ensure the activity undertaken is carefully monitored and focused on delivering a positive donor experience, not just financial performance.

Raising the profile of fundraising best practice and increasing the capacity of the sector to adhere to good fundraising practice for trustees, staff and volunteers is vitally important. 

There is clearly a general consensus that NI trustees have a decisive role to play in determining what should happen with regard to fundraising self-regulation.  It is also clear that trustees’ decision-making may benefit greatly from being informed through their own front-line fundraising staff.

Frances McCandless, Chief Executive, Charity Commission for Northern Ireland stated,

 “How a charity acts and interacts with the public is ultimately an issue for the Trustees and is part of the governance of the charity. The charity’s reputation is precious and the Trustees have a duty, not only to safeguard that, but to ensure that the charity is acting always within its values and the principles of good governance. Fundraising is a key area where charities interact with the public and bad experiences of charity fundraising practice can have a very serious effect, not only on trust and confidence in individual charities, but on the sector in general. Trustees must ensure they take responsibility for what is being done on their behalf and pay attention to the risks, as well as the benefits, that their fundraising practices may present.”

Neil Irwin, Chair of Institute of Fundraising (Northern Ireland) stated: 

“We should not underplay the importance of this issue as it goes to the root of trust in charities. This is also a matter not just for fundraisers but for Charity Boards and Trustees who should be taking a current and active interest in the development of regulation – no matter how big or small their involvement in fundraising or the methods and techniques they use.”

Mr Billy Webb, MBE, Chair of NI Hospice

 For us as Trustees it is as important to know that our approaches to fundraising activities reflect best in practice and compliance with industry standards.  As a local charity it is important that our all fundraisers, be they employed or volunteers, are professional in their approaches to engaging with the public.  We welcome the consultation on Fundraising Regulation in Northern Ireland, for us the focus is to ensure all our charitable activities are underpinned by good governance which supports us to achieve our vision – a local charity with international impact, pioneering palliative care for all who need it.”

Given the potential reputational and financial risk to charities in terms of the impact of even inadvertent bad fundraising practice, it is the trustees who ultimately have responsibility for protecting their beneficiaries by ensuring that the public have the requisite confidence and trust to donate to their cause.  

Whatever system of fundraising self-regulation is followed by Northern Ireland, one thing is clear:  trustees need to be, and be seen to be, strong champions for ethical fundraising and also a well-informed first line of defence for members of the public who are unhappy with a particular charity’s fundraising practices.