The Kids Company story, the Olive Cooke tragedy, Daily Mail articles, parliamentary hearings. The summer of 2015 was an uncomfortable one for the wider charity sector. The dust is now beginning to settle from the whirlwind of recommendations and responses that followed the criticism of the sector’s fundraising practices. So what are the changes? Do they affect you? What do you need to do?
Here is a summary of the major changes that have been made and that are still to come. If you do undertake any fundraising activity you will need to make sure that your policies and practices comply with the new regulatory framework.
1. Governors will be held accountable for school fundraising
Gone are the days when governor boards felt they could get away with relying on the goodwill of their volunteers or a well-drafted contract to ensure their fundraising was conducted responsibly and charitably.
The Charity Commission (“the Commission”) has updated its fundraising guidance (“CC20” – click here for the online version) and the emphasis could not be clearer – fundraising requires accountability to and the oversight of the trustees and this includes governors. Schools should ask themselves whether the governors set the strategy and know what’s going on. Does the strategy reflect the school’s values? Are any agreements with third parties monitored and do donors know where their money is going?
Schools with audited accounts or those using professional fundraisers or so-called ‘commercial participators’ should also be aware of the new duties contained in the new Charities (Protection and Social Investment) Act 2016 relating to their Annual Reports and third-party agreements.
Tips for compliance:
- Print off CC20 for each of your governors and staff involved with fundraising and discuss whether your governance reflects the Commission’s six “key principles”.
- Review any agreements you have in place with paid fundraisers or fundraising companies and obtain advice if you are unsure whether they require amendment. The regulations in relation to these have changed as a result of the Charities (Protection and Social Investment) Act 2016.
- Ensure regular attendance of senior fundraising staff at board meetings and include fundraising activity on the Risk Register.
2. There is a new regulator – The Fundraising Regulator (“FR”) – and there will be a new Fundraising Preference Service (“FPS”)
FR is the new independent regulator of charity fundraising. It was established in January 2016 and assumed its responsibilities on 7 July 2016, taking over from the now defunct Fundraising Standards Board. Of the other sector bodies, The Public Fundraising Association has now merged with the Institute of Fundraising to form a new ‘Compliance Directorate’ membership body to support the fundraising community and raise its professional standards.
FR will now take responsibility for the Code of Fundraising Practice (“the Code”) and will also manage the new FPS, when it has been established.
A new, banded fundraising levy will fund the FR and applies to schools who reported an annual spend of £100,000 or more on fundraising in the year ending 31 December 2014. By paying the levy, schools will automatically be registered with the FR and will be able to use the regulator’s “kite mark”. Schools not paying the levy will still be encouraged to register with the FR and can do so from September 2016.
The FPS will sit alongside the Telephone Preference Service (“TPS”) and Mail Preference Service (“MPS”) to enable any individual to control or limit the extent to which fundraisers can contact them. The final details of how the FPS will work are still being decided but the latest proposals include the following:
- the FPS should only apply to schools whose fundraising expenditure or activity is over a certain threshold (£100,000 of annual expenditure on fundraising has been proposed). In other words, schools below this threshold are not required to subscribe to the FPS although they may voluntarily do so.
- the FPS be split into four different ‘buttons’: (1) stopping junk mail (through the MPS); (2) stopping phone calls (through the TPS); (3) stopping contact from specific charities (the so-called ‘small red button’); and (4) the large red-button which will enable an individual to stop all fundraising communications from all charities.
- Schools can contact individuals for a limited period to clarify whether their registration on the FPS was intended to cover them.
- Registration to the FPS will be for a limit of two years. Individuals will need to re-register to remain on the FPS.
- FPS will not apply to communications whose core purpose is not fundraising.
Tips for compliance:
- Watch this space for the final guidance on whom the FPS will apply to!
- Even though FR has no statutory enforcement powers, breaches of the Code will be noted on the register at the Charity Commission so governors should ensure their fundraisers understand and comply.
- The Code is regularly updated – there have been over a dozen changes in the last year – so keep up-to-date! You can sign-up to the FR’s online updates.
- Regularly check your databases and call-lists against the TPS, MPS and FPS before contacting donors.
3. A stricter Information Commissioner’s Office (“ICO”)
The ICO is the regulator of the Data Protection Act (“DPA”) and the Privacy & Electronic Communications Regulations (“PECR”). The ICO updated its guidance on direct marketing this year (click here for the new version) to provide a greater focus on fundraising and marketing communications. The law has not changed but the guidance now gives greater clarity on the following:
- Marketing calls – can only be made to individuals on TPS if they have specifically consented to receiving calls from you – even if they are an existing supporter.
- The definition of consent to marketing communications in various contexts – whether consent can be indirect, assumed for existing donors (“soft opt-in”) when contacting by text or email and how long a consent will last – is covered in the guidance.
- Third-party consents – phrases like “are you happy to receive marketing from selected third parties” are likely to breach the ICO’s guidance.
The ICO may impose fines of up to £500,000 and are now taking an active interest in the practices of charities.
Tips for compliance:
- Ensure your fundraisers understand the ICO’s guidance and that the school’s databases and contact lists are reviewed and comply with the law.
- Review how the school obtains consents and that any privacy statements comply with best practice.
- FR is also expected publish new guidance on consent shortly. Keep an eye on our twitter feed to find the link to the new guidance.
This note is a general summary of the law and should not replace legal advice tailored to your situation. If you have any questions please do not hesitate to contact a member of our Schools and Charities Team.
For further advice, please call us on 01483 543210 or alternatively email email@example.com