Stephen Pidgeon: The new regulator should be merged with the ASA

Executives have produced a system that could actually work but it will not be good value for money, argues our columnist

Stephen Pidgeon
Stephen Pidgeon

At the recent conference of the National Council for Voluntary Organisations, the charities minister, Rob Wilson, threw his weight behind calls for charities to pay their dues to the Fundraising Regulator. Most charities now value the independence of the regulator, and its commitment to understanding the complexities of fundraising has been commendable.

But many trustees, like me, now question the costs required to run such a body. Can this regulator ever be good value for money - donors' money? In an elegant argument on studyfundraising.com, Professor Adrian Sargeant thinks not.

Sargeant contrasts the cost of running the Fundraising Regulator with the number of complaints anticipated each year, which from several sources he puts at about 800. He reckons only 50 of these would require investigation, with just a handful needing adjudication. It's worth remembering that, even in its busiest year, the old Fundraising Standards Board concluded only six adjudications.

The 800 complaints a year, at the regulator's own estimated operating budget of between £2m and £2.5m a year, gives a potential cost of £3,125 per complaint. A comparison with the Advertising Standards Authority, on which it was modelled, makes for gloomy reading. The ASA handles about 30,000 complaints a year at a cost of just £263 each.

Is this a fair comparison? Well, yes: the ASA regulates every other piece of marketing in the UK, including charity marketing. Through a small levy on all their advertising or direct marketing costs, charities are already funding it. And the quality of its judgments is the envy of the world.

The complaints are mostly trivial and are easily dealt with, but how does it look if we compare investigations? Investigations are serious: it is these that take time and energy. But on the estimate of only 50 investigations a year, that's a cost of £50,000 each. Even the Daily Mail might question whether that is good value for money to protect the public. And, compared with the ASA's cost of £1,456 per investigation, it looks like very bad news indeed.

A comparison with the ASA is pertinent because when these things were decided, many in the sector were calling for the new regulator to be run by the ASA.

That it was never properly considered might be because we charity people like to think we're different. More likely than that, those controlling other charity sector bodies resented the power that such a link might give to their rival, the Institute of Fundraising. You must remember that the unique strength of the ASA is that the UK's advertising codes, against which ASA members adjudicate, are written by two independent Committees of Advertising Practice. Members of these committees are giants in the commercial marketing sector; their equivalent would be people steeped in fundraising experience. And those proposing the Fundraising Regulator would have found that very hard to bear.

It is a credit to executives at the regulator that, by listening so effectively to fundraisers, they have produced a system that could actually work. But it is still ludicrously expensive and needs to be subsumed into the ASA. As a trustee, I would be tempted not to pay the regulator's fees. It is such bad value for money. It was ill-conceived and a better solution, available at the time, was less than a 30th of the cost. It is still not too late: merger discussions with the ASA could start immediately.

Stephen Pidgeon is a consultant and a teacher

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