Lord Grade to launch consultation on charging charities for the Fundraising Regulator

At a meeting of the All-Party Parliamentary Group on Charities and Volunteering, the chair of the new regulator also says it does not want to interfere but to restore public trust

Lord Grade
Lord Grade

The Fundraising Regulator is planning to launch a consultation in May on the levy it intends to charge to larger fundraising charities to fund its work, according to Lord Grade, the regulator’s interim chair.

He was speaking at a meeting of the All-Party Parliamentary Group on Charities and Volunteering in Westminster this morning.

The idea of charging charities that spend at least £100,000 a year on fundraising came from the Etherington review, which reported in September.

Speaking to Third Sector after the event, Gerald Oppenheim, interim head of policy at the regulator, said the specifics of the consultation had not yet been decided, but it might include asking for feedback on whether £100,000 was the right threshold for the levy.

He said it would seek written feedback from the sector and other interested parties, such as the government.

He said the move was motivated by the regulator's desire to inform people about the levy and be transparent about how it operates.

Asked for his view on concerns raised by some charities that funds paid by them would go towards the £300-a-day fees that the regulator's board members will receive, he said this was simply what regulators did.

He referred to the Charity Commission, which pays its trustees, and the Big Lottery Fund, which pays its board members a day rate.

"We're not a charity," said Oppenheim. "We're a company limited by guarantee and it's the regulatory arrangement we have in place."

During the event, the Conservative peer Lord Hodgson of Astley Abbotts, who is an officer of the APPG, wondered why one of the country's largest charities was querying whether to pay the regulator's start-up costs.

The RNIB said last month that it would not comply with a request for £15,000 from the regulator because it was not be sure it would be a good use of donors’ money.

Hodgson said: "When I hear that one of the largest charities doesn't want to pay £15,000 to set up Lord Grade's organisation, I think ‘what planet are those people on?’

"Have they not read about Olive Cooke and all the other situations and problems?"

Hodgson also criticised Joe Jenkins, director of fundraising at the Children's Society, who had spoken earlier on the panel, for saying that other sectors had also seen falling trust levels.

Hodgson said this did not obviate the need for charities to "be better than other people".

He said he was not convinced there had been a sea change in attitudes about fundraising among charities and that things had improved since he carried out his review of the Charities Act four years ago.

Responding to Hodgson, Peter Lewis, chief executive of the Institute of Fundraising, said fundraising directors and other sector leaders had changed over the past 10 months and now realised that they could not continue as they had in the past.

Lewis admitted that all had not been well with the previous self-regulatory system for fundraising.

"Between the three of us – the IoF, the Public Fundraising Association and the Fundraising Standards Board – we didn't create the change that was necessary," he said. "And I hold my hands up as part of that group that we didn't move as fast as we could have done."

But he said that fundraising had changed psychologically and culturally as well as structurally since the Etherington review and charities were "modelling their incomes down" as they put different practices in place.

Grade said he was confident the current environment was very different from before, particularly because the Charity Commission was now taking fundraising "extremely seriously" and emphasising to trustees that they had a fiduciary responsibility for it.

He said the Charities Bill clause that will give the government the power to create a statutory regulator also represented a major change.

Grade said he had noticed fear among charities about their fundraising and it would take time for the sector to become confident in the knowledge that the new regulator did not want to interfere with their work but rather wanted to restore public trust and confidence.

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