Regulation with Rosie: Good and bad practice in trading

The Charity Commission's Rosie Chapman on good and bad practice in trading.

Many charities rely on trading activities to keep them afloat. But the fact that trading arms are linked to charities does not mean they have exemptions from the legal and good practice provisions that apply to any other commercial transactions.

I recently read a letter in a Sunday paper from someone who had ordered goods from a charity. Her invoice showed that some items were unavailable but that her money had been kept by the charity anyway - "as a donation". When she contacted the organisation, she was told this was normal practice for sums under a certain amount, which was news to her. This is a highly effective way to turn a long-term supporter into a disgruntled consumer in a single step.

There are at least two clear issues involved here. The first is contract law. If someone buys something, they are entitled either to receive the goods they ordered or to get their money back. Charities are not exempt from the laws that protect consumers, and nor would trading standards officers view them any differently.

The other issue is that of effectively forcing supporters to opt out rather than asking them to opt in. Whether it is keeping money paid for unavailable items or automatically increasing donors' direct debits, this practice removes choice and transparency from a charity's supporters and can be perceived as underhand. It was by exercising their choice, after all, that they decided to start supporting the charity in the first place.

Trustees need to be aware that few things are more likely to dent individual trust and confidence in a charity than the appearance of arrogance, entitlement or a deliberate lack of transparency. And this applies to each and every aspect of a charity's activities, whether it is fundraising or campaigning.

- Rosie Chapman is executive director of policy and effectiveness at the commission.

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