Charities guilty of serious fundraising misconduct could have their charitable status or trustees removed by the Charity Commission, according to Lord Grade, chair of the new Fundraising Regulator.
In an interview on the You and Yours programme on BBC Radio 4 on Friday, Grade said the "nuclear weapon" among the sanctions available to the regulator would be to report a charity’s conduct to the commission, which could then de-register it as a charity or remove some of its trustees.
But a spokesman for the Charity Commission told Third Sector that it would not remove a charity from the register because it had broken fundraising rules. It would only do this if it found the organisation was not charitable, he said.
He confirmed that the commission could remove a charity’s trustees but said this would only happen in extreme cases.
Grade said that the regulator’s other sanctions included cease and desist notices and publishing the findings of its investigations into charities.
Asked for his reaction to last month’s refusal by Lesley-Anne Alexander, chief executive of the sight-loss charity the RNIB, to pay £15,000 towards the start-up costs of the fundraising regulator, Grade said it was still in conversation with Alexander.
"I’d be surprised if the RNIB in the end did not join us," he said. "Even if they didn’t join, they would still be regulated by us whether she likes it or not.
"What she gets out of it is the same as all charities, which is the sense that there is going to be a much closer eye on the behaviour of charities who have misbehaved in the past and that will restore long-term sustainable confidence in the British public."
Grade said it was "very late in the day" for charities to express concerns about whether funding the regulator would be value for money.
He said that conversations had already been held about the funding with the government when the charities act went through parliament, and the top 50 charities had said they would support the new regulator. "It’s an old argument," he said.
Grade said at the All-Party Parliamentary Group on Charities and Volunteering last week that positive responses had been received from 28 of the 50 largest fundraising charities, each of whom received a letter from the Institute of Fundraising and the Public Fundraising Association last November, asking them to make contributions to funding the new regulator on a continuing basis. Only one charity, which he did not name, had so far refused to contribute.
Grade appeared to sympathise with how some trustees had ended up having insufficient oversight of the fundraising in their organisations. "I’ve been a trustee of many many charities, and you don’t think to ask why we are doing so well and how is this money is coming in?" he said.
"You’re so relieved that the money is coming in because you exist really to serve the beneficiaries of your charity. You don’t necessarily stop to think because you don’t imagine that there are wrong ways to collect money and good ways."
Asked about the impact on charities’ income of the recent regulatory changes, Grade said that any "short-term blip" in fundraising would be a very small price to pay in exchange for the long-term goodwill and support of the public.