The Cross-Party (Etherington) Review on fundraising self- regulation & its implementation in England & Wales
This article looks at the Cross-Party (Etherington) Review on fundraising self-regulation and progress on the implementation of its key recommendations in England & Wales.
The Cross-Party Review
In a climate of prevailing negative media coverage and increasing concern about public confidence in fundraising by charities, Sir Stuart Etherington, Chief Executive of NCVO (National Council for Voluntary Organisations) was asked by David Cameron to lead a review into the self-regulation of charity fundraising. The review took place over summer 2015 and sought to identify what changes were required to rebuild public trust in fundraising by charities.
One of the options for Northern Ireland in terms of developing a new, adequately robust system for fundraising self–regulation is to simply join with charities in England and Wales, (and cross-border charities in Scotland), in accepting the new self-regulatory system set up as a result of the Cross-Party Review.
This article aims to shed some light on what this might mean for charities in Northern Ireland in practical terms by looking at the Cross-Party Review’s key recommendations and also the progress made to date on their implementation.
Recommendations of the Cross-Party Review
The Cross-Party Review concluded that the best option for fundraising self-regulation was co-regulation, involving enhanced self-regulation in the first instance, overseen by a new, independent regulator working, where necessary, in conjunction with statutory regulators such as the Charity Commission for England and Wales, Office of the Scottish Charity Regulator (OSCR) and the Charity Commission for Northern Ireland (CCNI).
As a result of the Cross-Party Review, the government drafted the Charities (Protection and Social Investment) Bill, which made a number of proposals to amend the system to make it simpler, more coherent and better able to act against those organisations that do not meet the standards expected of them. This has not yet been enacted.
The recommendations of the Cross-Party Review were accepted in full by the Government as a form of fundraising self-regulation which would, if followed, prove to be acceptable as an appropriate form of fundraising self- regulation. It is also clear that the Cross-Party Review was seen by the Government as a UK-wide review, with the corollary being UK-wide implications for the implementation of its recommendations.
“Any self-regulatory system based on the notion of membership is likely to suffer from a lack of public confidence. The Review has … concluded that any new fundraising regulator should have the power to adjudicate over all UK-based fundraising organisations, regardless of whether they have registered with the regulator or publicly shown their support for the system.”
Key recommendations of the Cross-Party review were:
- Establishment of a system of co-regulation for fundraising regulation
- Creation of a new Fundraising Regulator
- Creation and adoption of a single code of fundraising practice
- Creation of a Fundraising Preference Service
- Promotion of a ‘three lines of defence’ model
Implementation of the Cross-Party Review in England & Wales
So, in practical terms, how far along is the implementation process regarding the recommendations of the Cross-Party Review?
Recommendation 1 - A new single regulator should be established to investigate poor fundraising practice and assume the role of setting standards (the “Code of Fundraising Practice”).
The Fundraising Regulator was launched on 7th July 2016. It has now assumed responsibility for setting the fundraising code, enforcing compliance with the code, and adjudicating on all fundraising complaints in England and Wales. It will also operate the new Fundraising Preference Service (FPS) once this is fully developed.
All compaints about fundraising organisations in England and Wales, along with charities fundraising in Scotland but registered with the Charity Commission for England and Wales, will be dealt with by the new Fundraising Regulator.
The new Fundraising Regulator has a more effective sanctions regime than previous self-regulatory bodies and is likely to be funded through a levy to be paid by larger charity members, that is, those spending more than £100,000 each year on fundraising activities.
Unlike the FRSB, the Fundraising Regulator will not be a “membership” body as its remit will cover all organisations that engage in fundraising. Membership will not be compulsory although the aim is that 100% of those larger charities will join as members. Charities and other fundraising organisations will be invited to register with the Fundraising Regulator from Autumn 2016 to demonstrate their support for the Code of Fundraising Practice and commitment to a range of good practice measures.
The Fundraising Regulator will usually only deal with a complaint if it cannot be resolved successfully with the fundraising organisation involved within 30 working days.
Recommendation 2 - A single Code of Fundraising should be put in place
The Cross-Party Review identified a need for responsibility for the Code and the rule books to be transferred to a new Fundraising Regulator to safeguard the independence of fundraising regulation. The Code and the rule books were therefore formally transferred to the Fundraising Regulator at its launch on 7th July 2016. Decisions on changes to the Code are now made by the Fundraising Regulator’s Standards Committee in consultation with fundraising stakeholders. The PFRA rules have now merged with the Code. A further recommendation that the IoF and PFRA merge with a renewed focus on providing services for members has now also been implemented and a consultation is currently underway regarding a review of the Fundraising Code of Practice
Recommendation 3 - The new regulator should have strong links with the Charity Commission, and with the Information Commissioner’s Office in order to ensure that charities followed its rules.
Memorandums of Understanding have been signed with the Charity Commission for England and Wales, the Institute of Fundraising and the Information Commissioner’s Office (ICO). (The ICO is an executive non-departmental public body, sponsored by the Department for Culture, Media & Sport which upholds information rights in the public interest, promoting openness by public bodies and data privacy for individuals.)
Recommendation 4 - A new Fundraising Preference Service (“FPS”) should be created that would enable the public to opt out of fundraising communications.
A key frustration among members of the public identified by the Cross-Party Review was the lack of control many felt over the manner in which they were approached with fundraising requests and also the frequency. The Telephone Preference Service (TPS) and the Mail Preference Service (MPS) allow members of the public to make their contact preferences clear to organisations contacting them by phone or by post. However, feedback from the review indicated that the public needed something over and above these systems. The Fundraising Preference Service is now in place. (More details can be found here)
Recommendation 5 – the “Three Lines of Defence Model” should be adopted.
The Cross-Party review emphasised the importance of charity trustees themselves taking responsibility for proper fundraising practices. Given the duties of charity trustees already in place, the Cross-Party review recommended a co-regulatory framework referred to as the ‘three lines of defence’ model:
1) First Line of Defence - Charity Trustees
- Trustees have retained primary responsibility for the charity's fundraising practices, whether carried out by the charity directly or by a professional fundraising consultant.
2) Second Line of Defence – Fundraising Regulator
- New Fundraising Regulator has now replaced the FRSB and taken responsibility for the Code of Fundraising Practice from the Institute of Fundraising (IoF)
- New Fundraising Regulator now empowered to investigate breaches of the Code and complaints regarding both members and non-member organisations
- New Fundraising Regulator now has a range of sanctions available including naming and shaming organisations, mandating attendance at training, issuing 'cease and desist' orders and requiring the clearance of future campaigns
- New Regulator now has responsibility for overseeing Fundraising Preference Service.
3) Third Line of Defence – Statutory Regulators
- Memorandum of Understanding are now in place to enable Charity regulators to back up the Fundraising Regulator by taking action where there is a breach of a charity trustee's duties
- ICO (Information Commissioner's Office) is now regulating where there are concerns regarding the use of personal data or direct marketing
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