Is Michael Grade the right man to sort out fundraising?

Lord Grade
Lord Grade

At Lord Grade of Yarmouth's first staff function after being appointed chair of the lottery operator Camelot more than 10 years ago, he organised a game of bingo. Unknown to the players, Grade had rigged the event so that everyone needed the same number to win. When it was called, all the staff thought they'd won, then realised they'd been fooled.

The story, told by Dianne Thompson, who was Camelot chief executive at the time, illustrates the broadcasting heavyweight's sense of humour. This was also evident when Grade made his first appearance as interim chair of the new Fundraising Regulator at the fundraising summit hosted by the National Council for Voluntary Organisations in December.

Grade recalled that when he was director of programmes at London Weekend Television, the late Lady Plowden, chair of the Independent Broadcasting Authority, which regulated commercial television, took issue with the soap opera Crossroads because it was "distressingly popular".

It was his way of conveying he had experience of being "heavily regulated" and that this was his strongest qualification for his latest job. "I know from bitter personal experience how out of touch regulators can be," Grade said.

Born into a showbusiness family, Michael Grade is almost as well known for his cigars, red socks and braces as he is for a career that has included top jobs at the BBC, ITV and Channel 4. But his latest appointment, in November, caught everyone by surprise.

The Conservative peer agreed to take on the role for at least a year, working a minimum of four days a month at a daily rate of £500. He now has to find a way to restore public trust and confidence in charity fundraising after Sir Stuart Etherington's review of fundraising practices.

Etherington, chief executive of the NCVO, describes Grade as an impressive appointment: "I met him a few times when he was chair of the BBC and I was chair of the appeals advisory committee, which dealt with things like whether there should be a Disasters Emergency Committee appeal.

"I found him a very good judge of a situation, able to understand complex matters and approach them in a no-nonsense way. He has a certain presence - he's a heavy-hitter with a big reputation and a wide range of contacts.

"At the same time, it's important that there should be someone working to him who understands the history and the subtleties of the situation. He will bring the external perspective on regulation while the chief executive will put the system in place."

A year to establish a regulatory system that satisfies the public, government and fundraisers seems a tall order, but Grade has a reputation for operating quickly, as demonstrated at the summit when he announced that he had already appointed George Kidd, chair of the Direct Marketing Commission, to chair the working group on the most contentious aspect of the new regime, the Fundraising Preference Service. He also said he expected to have a chief executive by Christmas. Neither position was advertised - a formal process involving headhunters would be too long and expensive, he said, adding that he didn't want to hand any more money to executive search firms such as Egon Zehnder.

Martyn Lewis, chair of the NCVO and former newsreader, who has known Grade for 30 years, describes him as a "problem-solver" and "skilled negotiator" who won't be fazed by the challenge. "Anyone who has spent as many years as he has in the labyrinth of politics and structures at the BBC will find welcome relief in the arguments and complexities of the voluntary sector," says Lewis.

The threat of statutory legislation "hangs over the sector's head like the sword of Damocles", Lewis says, but he does not think the government will step in unless it really has to.

"The challenge for Michael, therefore, is to find a way of doing it that keeps the voluntary sector happy while listening to concerns about what shape the preference service should take," he says.

The arguments about the FPS are complicated for anyone, let alone somebody who hasn't worked in fundraising. Grade, whose only touch of red at the summit was a handkerchief made necessary by a cold, told those at the event he "still hadn't learned the alphabet soup of acronyms" of sector bodies, but emphasised his experience of big fundraising appeals. It was his decision, he recalled, to devote an entire night of BBC programmes to Children in Need, and to give extensive airtime to Comic Relief and ChildLine.

But not having worked in the voluntary sector will, says Lewis, enable Grade to benefit from the "clarity of the newcomer". Fundraisers, he adds, can expect a fair hearing: "He's extremely engaging, but sometimes he will fix you with a stare that says 'I want to get to the point here'."

Grade demonstrated his willingness to get on with things when he told the summit it was now all about implementing Etherington's review, not debating its merits. He expects "an intense few months" and anyone who doesn't agree with the report's recommendations "won't get a lot of sympathy".

A senior figure in fundraising, who did not wish to be named, told Third Sector there had been sweepstakes about who would be appointed chair, but nobody even thought of Grade.

"The most important thing is that the regulator inspires the trust of the public, politicians and the sector, so someone of Grade's standing and high profile is good from that point of view," the source says. "The Fundraising Standards Board was unable to inspire that confidence, which is why a body with more powers was needed. He's a good choice so long as he understands that self-regulation does not mean being a stooge of government - he needs to show independence, because what's being proposed is as close to statutory regulation as it can be without actually being so.

"He also needs proper fundraising experience around him, on the committees and on the wider staff. The jury's out on whether he will show a willingness to bring in people from fundraising to set up the structure and provide the staff."

Caroline Diehl, who has met Grade often during her 21 years as chief executive of the Media Trust, says he's the ideal man to walk the tightrope between regulators, the public and fundraisers. "It's a great appointment - he's had to think at the highest regulatory level, and he's a populist," says Diehl. "He's used to being scrutinised by government, advertising and broadcast regulators, and BBC governors; he's also clever and creative at communicating."

She believes that Grade won't shy away from legitimate public concerns. "The reason the Daily Mail has found it so easy to attack charities is that charities have lost the trust of middle England," she says. "The sector needs more scrutiny and must be more honest about fundraising. Michael will tackle those key issues around messaging and how charities communicate with the public. He understands middle England. I hope the big charities are open to new ways of thinking and can engage with him.

"He'll be on the our side for how we can do things better. He won't be on the side of charities that are selling data."

Dianne Thompson says whoever gets to work with Grade will receive great support, as she did when he was her chair at Camelot from 2002 to 2004. "Michael was chair when sales were in decline, and he couldn't have been more helpful," she says. "He gets to know the business well, but he's clear about the roles of the chair and chief executive and will get in good people."

Thompson now owns a hotel in the Isle of Wight and remains friends with Grade, who is a keen sailor. "He's a lot of fun, always cracking one-liners, but beneath the showman facade he's a serious individual," she says.


Appointing a chief executive

This is the first item on Grade's to-do list. "I shall make the choice," he told Third Sector in response to emailed questions. "I do not want to go to the expense of headhunters. We have had interest from a number of appointable candidates and, from what I have seen, I am confident we will have somebody in situ by Christmas - we have got to get this done by Christmas to meet the timetable (of setting up the Fundraising Regulator within a year)."

The Fundraising Preference Service

This has proved the hottest potato in the proposals made by Sir Stuart Etherington, accepted in full by the government. Grade has already appointed George Kidd, chair of the Direct Marketing Commission, to chair a working party on the subject (see Hot Seat, page 7). A second working party is being set up with representation from the Information Commissioner's Office to consider the question of how people should opt in to be contacted by charities.

The FPS was envisaged by Etherington as a "reset button" that people could use to stop all communications from charities. Fundraisers have objected that this is too blunt an instrument and have asked what charities should do if an established donor who has given explicit consent to be contacted then registers with the FPS - would the consent override the FPS?

Both Etherington and the charities minister, Rob Wilson, have said that the FPS must give people the option of ending all fundraising communications from charities. But Etherington has said he has an open mind about allowing it to be more "granular", allowing people to opt out from some charities but not from others. "It could be very difficult and expensive to do," he said. Wilson has also said he would have no problem with a system that would allow people to make "a more nuanced choice", or with an exemption for smaller charities. Where does Grade stand on this? "We shall await the recommendation of the working party," he told Third Sector.

Staff and structure

One question for Grade will be whether he starts from scratch or chooses to take advantage of the experience of the Fundraising Standards Board, which persuaded 2,300 charities to become members and has adjudicated on complaints since 2007. It has a staff of six. Asked about this, Grade said: "We need to preserve the best of the old regime and make sure we incorporate it, which will be achieved by consultation." The Charity Commission has said it will second a member of staff to the new regulator for six months. Some fundraising representatives say staff from other organisations with relevant experience could also be seconded; they also say they feel they are in limbo, with no one to talk to about the constitution of the new regulator.

The key committees

These will be the practice committee, which will set the code of practice for fundraisers, and the complaints committee, which will determine whether charities have breached the code and decide on any sanctions. It is unclear whether the practice committee will inherit the Institute of Fundraising's Code of Fundraising Practice. Fundraisers will be arguing for half the members of the practice committee to be fundraisers, leaving the chair with a casting vote, and for a stronger representation on the complaints committee than is the case with the FRSB, where only one in 12 members is a fundraiser.

The timescale

Etherington's original hope of getting the new regulator up and running within six months appears to have been abandoned. Grade says he is confident the system can be set up within a year. "A very complicated situation has developed, mostly in a good way," he adds. "Clearly, some things are wrong and need to be addressed in order to maintain the support of the generous British public."

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