Joe Saxton: Fundraising regulation has made strong progress but problems remain

Our columnist reviews the state of fundraising nearly a year on from the Etherington review

- This article has been corrected; please see final paragraph

The release of the Etherington review of fundraising regulation was almost a year ago. So what has happened in the past year and what is the scorecard on where we are now up to? There are at least several strong areas of progress in the past year.

First, a huge amount of work has been done on establishing the new Fundraising Regulator. There is a strong, credible and effective executive in place, and few in the sector can doubt that the new body will be a powerful and focused operator. Equally important, the new regulator will have bigger budgets and sharper teeth.

Second, under the Institute of Fundraising the code-setting committee had a massive conflict of interest. The code was set by a committee of fundraisers, with nobody representing donors, and the institute dragged its feet in changing that until it was far too late. So the new independent committee is very welcome. But make no mistake, the code is going to get tougher from here on in.

Third, fundraising is now everybody's responsibility. Before the tragic death of Olive Cooke and the media storm that followed, fundraising was the sector's "necessary evil". Most trustees, chief executives and sector leaders hoped the fundraising arm was doing a good job, but didn't want to open Pandora's box. Witness the fact that the National Council for Voluntary Organisations' current strategic plan doesn't mention fundraising. Now fundraising is everybody's responsibility. No ifs, no buts and no looking the other way.

Alongside these positive points are some areas where problems still remain. First, it is hard not to feel that small and medium-size charities are the real losers. For the most part, it wasn't their activities that created the dislike of industrial fundraising, but they are having to accept the new regime, like it or not. Nowhere is this more stark than in fees to the new regulator. The hospice movement is a case in point. With 200 hospices perhaps paying as much as £2,000 each, they might be making a contribution of between £300,000 and £400,000 to the new regulator while raising the same as Cancer Research UK, which is contributing £10,000. No, doesn't look fair to me either.

Second, the Fundraising Preference Service is still a mess. It wasn't clear how the FPS would work when it was proposed, and we are little clearer now. It is certainly going to cost the new regulator a lot to run, but it will also be costly for many smaller charities to comply with its rules. It isn't clear why it is an improvement on opt-in, and it punishes all fundraising organisations. It is still not clear whether programmes such as The Guardian's membership scheme or Conservative Party donations will be covered.

And third, one of the subtler dangers of the new regulatory regime is that fundraising will mask wider sector problems.

While there are various problems with issues such as chief executive pay, trusteeship, transparency and other concerns, fundraising is the only area with a self- imposed regulatory framework. We can't let the fundraising regime inoculate the sector against the need to change other aspects of how it works.

Joe Saxton is the founder and driver of ideas at the research consultancy nfpSynergy

- This article was amended on 30 August 2016 to remove a reference to the Minister for Civil Society having to approve board members for the Fundraising Regulator and deciding how it worked. The Fundraising Regulator said its chair was solely responsible for board appointments and that its board decided how it worked. 

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