The Cabinet Office is expected to issue new guidance on rules that allow charities to fundraise or collect donated goods door to door nationwide after concerns were raised by the Public Fundraising Association and the Charity Retail Association.
The guidance on national exemption orders for charities is expected to be changed, sources close to the situation said, after a group of charities and agencies led by the PFRA and the CRA expressed fears that new rules introduced last December could give the Minister for Civil Society the ability to remove the orders from charities that generated insufficient returns from their door-to-door activities.
NEOs, currently held by 45 UK charities, allow organisations that have obtained licences to do door-to-door fundraising and clothing and goods collections in certain local authority areas an exemption from having to apply for a licence each time they want to carry out these activities.
Third Sector understands that the PFRA met Cabinet Office officials earlier this month and is expecting a new version of the guidance to be issued any day now, although the Cabinet Office said it did not envisage this being agreed until later this year.
The existing guidance, which came out on 22 December, says that the minister may revoke an NEO if charities spend an "inadequate" proportion of the money they raise from door-to-door collections on charitable purposes or if any person is excessively remunerated from the proceeds of the collection.
It asks charities to report the costs they incur from their collections, including those of printing, payments to contractors and the sums retained by fundraising agencies or clothes recycling companies, and to state the profit they make "after expenses were taken out of the proceeds by the commercial partner".
Matt Kelcher, head of public affairs and research at the CRA, told Third Sector there was a risk that this information would be misinterpreted by the Cabinet Office and that some charities would lose their NEOs.
"If a charity is using a collection firm but the Minister for Civil Society thinks it is taking too much of a profit and not enough is going to charity, he can cancel its NEO," he said. "There’s no definition of what percentage needs to go to charity – it’s just at the personal whim of the minister."
He said the Cabinet Office had held a series of meetings about the guidance and received feedback from CRA members who carried out clothing collections door to door and were worried that the changes would cause them problems.
He said the office had promised to produce another draft of the guidance but this had not yet been forthcoming because of staff changes.
Dominic Will, joint managing director of the agency Home Fundraising and a trustee of the Institute of Fundraising, said that door-to-door fundraisers were particularly disappointed that the Cabinet Office had brought in the guidance with no prior warning.
He said he was concerned that the Cabinet Office wanted to see fundraising returns over the course of a financial year rather than over a longer-term basis because it could make the activity appear less profitable. "If you invest in a regular giving campaign, you’re unlikely to be making money in the first year," he said. "You have a strong return of investment over a longer period, so if you’re reporting on monies received that financial year it’s not going to tell the whole picture."
Will said that the group had called on the Cabinet Office to consider information about charities’ fundraising costs and income "fairly and over the long term".