Review of the year that was 2016

Inevitably, fundraising dominated the news in Third Sector as the year unfolded

Fundraising yet again dominated charity news in 2016, as the sector continued to deal with the fallout from last year’s negative media coverage and further damaging revelations came to light.

A major change to the self-regulatory structure came when the Fundraising Regulator took over from the Fundraising Standards Board, a recommendation made in Sir Stuart Etherington’s review last year.

It wasn’t all plain sailing for the new body, with a handful of the 50 largest fundraising charities it asked to provide £15,000 each in start-up funding refusing to play ball, including the Tate and the RNIB, which said it was not convinced this represented good use of the charity’s money.

The regulator consulted on and then began to implement the charging structure it will use to pay for itself: from £150 a year for charities that spend between £100,000 and £149,999 per annum on fundraising, to £15,000 for the two charities that spend more than £50m a year raising funds.

The regulator also set out how the controversial Fundraising Preference Service would operate. Although a "reset button" that would enable people to block all fundraising communications from charities was proposed by Etherington and backed by Rob Wilson, the Minister for Civil Society, the regulator announced at the start of December that it was not going to put this into practice and would instead require people to name the specific charities that they no longer wished to hear from.

The regulator’s first report, published in November concluded that seven charities, including Save the Children, Unicef and the RNIB, breached the Code of Fundraising Practice when working with the now defunct fundraising agency Neet Feet.

The agency shut down after being the focus of an undercover investigation by The Sun newspaper, which reported that the agency was employing fundraisers who targeted elderly people with aggressive doorstep techniques.

Meanwhile, the Information Commissioner’s Office began the year by announcing that it had signed agreements with various large fundraising charities about their data-processing activities, before it emerged in early December that it had fined the RSPCA £25,000 and the British Heart Foundation £18,000 for breaches of data protection law. The ICO concluded that the charities had secretly screened millions of donors so they could be targeted for more money.

The story is not likely to go away soon – fines levied on other charities for similar offences seem likely to follow in 2017.

Other fundraising revelations this year included the closure of the Penny for London contactless scheme, which it was hoped would raise £25m a year but ended up collecting just £3,000 in all, and the embarrassment of Concern Worldwide after it charged almost 25,000 direct debit supporters up to 100 times the amount they had pledged because of an administrative error.

Regulation and governance

The Charity Commission gained new powers through the Charities (Protection and Social Investment) Act. The legislation, some areas of which have been controversial, gives the regulator the power to issue warnings to charities and to suspend and disqualify trustees.

The regulator continued to inch forward with plans to charge charities for its services. William Shawcross, the commission’s chair, said in November that the regulator hoped to raise £5m over the next two years this way and would consult on it soon.

The commission came under fire for releasing guidance warning charities that if they chose to campaign in the EU referendum they risked breaching the commission’s CC9 guidance on political campaigning and charity law.

The guidance, which was criticised by charity bodies for using the wrong tone and by the charity law firm Bates Wells Braithwaite for "misrepresenting the law", was subsequently revised to give it a softer tone.

The commission also took on three new board members and reappointed two existing ones, despite their roles in controversial incidents over the previous 12 months.

Policy and politics

In the political arena, the Office for Civil Society found a new home at the Department for Culture, Media and Sport after Theresa May’s appointment as Prime Minister, and Labour appointed a new shadow charities minister in the form of Steve Reed, the MP for Croydon North.

Some in the sector celebrated after the government rowed back on plans for a so-called "anti-lobbying clause", which charities feared would prevent them from having dialogue with MPs and civil servants, although others were more circumspect. The measure, which would forbid charities from using public funds to lobby government, was first announced in February but put on hold in April.

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Charities were meanwhile broadly unmoved by measures in both the Budget and the Autumn Statement, and the House of Lords Select Committee on Charities took evidence on governance and sustainability in the sector for a report that is due to be completed by the end of March.

Unfair dismissal

Elsewhere, the former chief executive of the Terrence Higgins Trust reached an out-of-court settlement with the charity in December after an employment tribunal ruled in July that she had been unfairly dismissed because she tried to blow the whistle about the inappropriate behaviour of a trustee and other issues at the charity, while it emerged that a senior executive at the Wellcome Trust was paid more than £3m last year.

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