Charity reports Fundraising Regulator to Trading Standards over levy letter

Children and the Arts claims that a letter that included an invoice implied that the levy was mandatory, but the regulator denies the accusation

An arts charity has reported the Fundraising Regulator to Trading Standards after receiving an invoice that the charity says implies the levy to fund the regulator is mandatory.

Children and the Arts received a letter and an invoice from the regulator in December saying that the charity, which had an income of £933,000 for the year to 31 March 2016, was included in the levy arrangements to support the operating costs of the new fundraising regulator.

The letter says the levy will apply for three years and that the invoice, for £150 a year, is in arrears for services delivered since 1 September 2016.

It says the first sum is due to be paid within 30 days of the bill being issued, with another instalment due in June 2017, and a third in June 2018.

The four-page letter does not say the charity is not obliged to pay the levy, but does mention on page three that "by voluntarily paying the levy" charities are "contributing their allotted share to meet regulatory costs". The invoice itself does not mention anywhere that the payment is voluntary.

Sending unsolicited invoices giving consumers the impression they have ordered a product or service when they have not and omitting key information that consumers need to make an informed decision are both banned under the Consumer Protection from Unfair Trading Regulations 2008.

Anyone convicted for these offences can face fines as well as imprisonment for up to two years.

Jeremy Newton, chief executive of Children and the Arts, told Third Sector that the letter and invoice had clearly implied that the levy was a mandatory charge for services, rather than a donation.

"Firing off invoices to hundreds or potentially thousands of charities that imply this is a mandatory levy when it’s a voluntary seems to be so completely against the principle of why the Fundraising Regulator was set up that I had to make some complaint," he said.

As well as being highly unethical, he said, the practice could be illegal.

He called on the regulator to review the documentation it sends out to charities and to be sure it was being open and transparent in its dealing with them.

"It’s about setting an example," Newton said. "If charities are supposed to be getting their act together in relation to some of the stories that were flying around last year, then we should also be seeing transparency and good practice from the regulator itself, not aggressive tactics similar to those they were set up to tackle."

He said he had no objection to the idea of charities funding the regulator, and planned to pay the levy, but had wanted to test the legality of the way it was being collected.

"There are charities living on a knife-edge financially, and they need to know that, if necessary, they don’t have to pay or they can defer payment," Newton said. "Sending out invoices talking about arrears and giving deadlines for payment does not make that clear."

But the Fundraising Regulator refuted claims that charities were being misled about the levy.

A spokesman said: "We have been very clear that the levy is voluntary. All charities who are expected to pay received a letter telling them that it is voluntary and our website also states that the fee is not mandatory. The charity was given prior notice of this through a letter explaining the set-up and the costs, and we have also been clear in all communications since."

But charities were expected to contribute in order for the Fundraising Regulator to be effective, he said.

He said that anyone with questions or concerns about the levy should contact the regulator at enquiries@fundraisingregulator.org.uk.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus