The Fundraising Standards Board should be abolished and the Institute of Fundraising stripped of its responsibility for overseeing the Code of Fundraising Practice, Sir Stuart Etherington's review into the regulation of fundraising has concluded.
In a 72-page report, which was published on 23 September, Etherington – who was appointed in July to carry out the review by Rob Wilson, the Minister for Civil Society – said that a new regulator should be established to replace the FRSB and set its own standards for fundraising good practice.
The report said this was necessary because the FRSB had been ineffective at regulating fundraising and had lost the confidence of the public and charities. It said the IoF remained open to accusations of conflicts of interest, having failed to administer the existing code of practice in a way that had protected public confidence.
The review also recommended the creation of a new Fundraising Preference Service that would enable the public to opt out of fundraising communications. It said the IoF and the Public Fundraising Association should merge into a single professional fundraising body.
According to the review, the new watchdog, tentatively named the Fundraising Regulator, should be funded by a levy on the approximately 2,000 charities that spend more than £100,000 a year on fundraising from the public
It should, said the report, have strong links with the Charity Commission and the Information Commissioner's Office to ensure that charities followed its rules. It would also have a fundraising practice committee, on which a number of professional fundraisers would be permitted to sit, and a complaints committee, which would handle complaints from the public.
The review recommended that the new regulator should be set up by March 2016 and the FRSB should continue to act as the main regulator for fundraising until this had happened.
The proposal to remove responsibility for the code from the IoF came despite its moves to strengthen various aspects of the code in June and set up four task groups that spent the summer looking at a range of issues raised by the FRSB in its interim report on the circumstances surrounding the death of Olive Cooke.
Etherington's review said that allowing fundraisers to control the code had given them the opportunity to set their own rules, which could be biased towards weak standards.
The review was published after the IoF announced in September that it had appointed a new independent chair to its standards committee in the shape of Suzanne McCarthy, the former Immigration Services Commissioner, and that three independent committee members would soon be appointed.
Etherington's review said that although this move was an improvement on the previous situation, where the committee consisted exclusively of fundraisers, it would not mitigate the fact that a lengthy negotiation process occurred every time the code needed changing because fundraisers influenced the committee so heavily.
The other problem with the standards committee being housed in the IoF was that the IoF's board got the final say on standards committee decisions, the review said.
Separately, this point in the review was made apparent earlier when a letter coordinated by the IoF on behalf of 17 charity chief executives was published on the front page of The Sunday Times on 6 September, announcing that the IoF was planning to endorse an opt-in system for data-sharing – despite the fact that the task group it had set up in June to review this issue was yet to meet for the final time and make its recommendations to the standards committee, which was due to vote on the various task groups' proposed code changes on 17 September.
The chair of the data task group, Dawn Varley, a consultant at the database consultancy Purple Vision, who was also a member of the standards committee, resigned from both roles on 7 September, saying she thought there was no longer any need for her input.