Proposed new body to regulate all charities could be funded by levy on those spending £100k-plus on fundraising

Charities that spend more than £100,000 on fundraising could pay a levy
Charities that spend more than £100,000 on fundraising could pay a levy

A new fundraising regulator could be funded by a levy on charities that spend more than £100,000 a year on fundraising from the public, according to Sir Stuart Etherington’s review of the self-regulation of fundraising.

The review, published today, says the new body, provisionally called the Fundraising Regulator, should be established to replace the Fundraising Standards Board and assume the Institute of Fundraising’s responsibility for overseeing the standards for fundraising good practice. It says the FRSB should be closed down because it has been ineffective in regulating fundraising.

The review panel – chaired by Etherington and comprising Lord Leigh of Hurley, Baroness Pitkeathley, and Lord Wallace of Saltaire – said the new body should have tougher sanctions than the FRSB and should set its own standards for fundraising practice.

The review says the regulator should be better funded than the FRSB has been, receiving a levy on the approximately 2,000 charities that engage in public fundraising. It would have strong links with the Charity Commission and the Information Commissioner’s Office, the review says, to ensure that charities followed its rules.

The review says the regulator should have a fundraising practice committee, on which a number of professional fundraisers would sit, and a complaints committee, which would handle complaints from the public.

Charities registered with the new regulator would be entitled to use a kitemark to demonstrate to the public that they adhered to its rules, while organisations that seriously or persistently breached the rules would be named and shamed and could be forced to halt their fundraising until problems were resolved.

The Fundraising Regulator's reach should be universal and it should be able to adjudicate on any fundraising charity, body or agency, the review recommends.

It also recommends that the new regulator should report to parliament’s Public Administration and Constitutional Affairs Committee on a regular basis in order to give parliament the opportunity to scrutinise its work on the public’s behalf.

The Fundraising Standards Board said in a statement that it was very disappointed that the review had called for its closure and for a new body to be established in its place.

"We strongly believe that a revamped FRSB, properly resourced, would be the most viable and cost-effective way of moving forward in developing better regulation of charity fundraising," it said.

"For the immediate future, we will continue to deliver the current regulatory system, addressing public complaints and completing current investigations as well as any further allegations of poor practice which might arise."

Peter Lewis, chief executive of the IoF, told Third Sector that it had not come as a surprise that the review had said the IoF's responsibility for the code would be removed. The IoF did not agree with the proposal and its members had indicated that they wanted it to retain oversight of the code.

But he said he was pleased the review had said the IoF could be involved in the new Fundraising Practice Committee. The review states that a member of the IoF should be given observer status on the committee.

Asked if he was disappointed the IoF had not been given a more influential role on the committee, Lewis said that the detail of its composition had not been decided yet and it was not "set in stone".

Lewis said that in spite of the review’s call for the IoF to increase its focus on good practice and member services once it no longer had responsibility for the code, he did not anticipate dedicating less of the IoF’s resources to developing fundraising standards. "We will still spend a lot of time feeding into deciding what the standards are," he said. "We will have a big role in that."

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