Sir Stuart Etherington’s review of fundraising self-regulation did not go far enough, the Public Administration and Constitutional Affairs Committee’s inquiry into charity fundraising has concluded.
Published today, the final report of the committee’s inquiry into fundraising techniques, which was launched in July, says that while it welcomed the government’s acceptance of the Etherington review last October, its proposals "should be further enhanced".
The report says that the new Fundraising Regulator should be made accountable to the Charity Commission, which should become more high-profile and be more proactive in ensuring that the new self-regulatory system for fundraising works.
It says the commission should act as a "guarantor" of the new system, ensuring that regulators such as the Fundraising Regulator and the Information Commissioner cooperate with one another and that trustees understand their duties.
The report refers to a new amendment to the charities bill tabled by the chair of the PACAC, Bernard Jenkin. It would oblige the commission to report annually to the government on its view of the effectiveness of fundraising regulation.
It also refers to a second amendment from Jenkin, which would give the commission the power to hold public hearings on fundraising regulation and charity activity with representatives of charities. The commission currently holds only private inquiries.
Both amendments are expected to be debated in the House of Commons this week.
The report says trustees are ultimately responsible for every aspect of their charity’s activity, including fundraising and that "stronger regulation is no substitute for the required change of attitudes and behaviour from trustees".
It says that they, along with the Charity Commission and the other regulators, should assist the sector in developing a more ethical fundraising culture and ensure that bad practices are not tolerated.
It also says that the government should monitor the sector to ensure it is able to use the reserve powers that would enable it to act should self-regulation fail. "It would be a sad and inexcusable failure of charities to govern their own behaviour, should statutory regulation become necessary," the report says.
The report is critical of the Etherington review’s proposal to create a new Fundraising Preference Service, saying that it would duplicate the function of the existing Telephone Preference Service and add limitations to the activities of charities that do not exist for any other sector.
It urges the government to "immediately" bring into force section 77 of the Criminal Justice and Immigration Act 2008, which it says would allow the Information Commissioner to enforce laws protecting the use of personal data. The legislation came into being in 2008 but has never been implemented.
The report says the ICO failed in not being proactive enough at regulating charities’ misuse of data in the past and that, although the commissioner is rightly being more proactive now, this has come too late for many of the people exposed by the bad fundraising practices last summer.
Jenkin, the Conservative MP for Harwich, said in a statement: "This sorry episode has damaged the reputation of charities across the board, including those who have behaved properly, and hindered their ability to raise essential funds. This is the last chance for the trustees of charities, who allowed this happen, to put their house in order. Ultimately, the responsibility rests with them."
He noted that the chief executives of the charities that gave oral evidence to the committee – Save the Children, Oxfam, the NSPCC and the RSPCA – admitted that they had not properly scrutinised fundraising by subcontractors. He said the only possible conclusion from this was that the charities’ trustees were either incompetent or "wilfully blind" to what was being done in their names.
"Trustees already have all the powers they need: they must have the right skills, information and attitude to prevent this kind of poor and sharp practice happening again," he said.