Fundraisers and regulators must be more accountable to beneficiaries, argue academics

The warning comes in a report commissioned by the European Center for Not-for-Profit Law

Beneficiaries: 'downward' accountability important, says paper (Photograph: EyeEm/Getty Images)
Beneficiaries: 'downward' accountability important, says paper (Photograph: EyeEm/Getty Images)

Fundraisers and fundraising regulators need to come up with a way to make themselves more accountable to charities’ beneficiaries, according to a new report.

The report, Fundraising Self-regulation: An Analysis and Review, was commissioned by the European Center for Not-for-Profit Law and co-authored by Ian MacQuillin, director of the charity thinktank Rogare, Adrian Sargeant, co-director of the Institute of Sustainable Philanthropy, and Harriet Day, a research fellow at the institute.

The report reviews different fundraising self-regulatory systems around the world and examines what makes a successful system.

A statement accompanying the report says self-regulation is often good at "upward" accountability to donors and governments, those who have the most power to affect the self-regulatory regime, but there is often a poor level of "downward" accountability to beneficiaries because they do not have the same power to make demands on charities.

The report calls for "all involved in fundraising regulation" to review their accountability processes.

"But more than this, rethink what kinds of accountability they owe their various stakeholders, based on the theory and scholarship we have described in this report," it says.

"We particularly recommend devising a model for beneficiary accountability in fundraising self-regulation."

MacQuillin said a wide range of bodies were involved in regulatory systems, such as government, ratings agencies and information services.

"But those actors are often most focused on protecting donors’ interests," he said.

"We see this so often with the arbitrary upper limit on admin costs that are – or have been – part of many countries’ standards.

"And while there may be many ‘prudential’ reasons why self-regulatory bodies think their primary accountability is upwards to donors and the public, there is plenty of scholarship that argues for a downward moral accountability to beneficiaries, to ensure they are not harmed by unnecessarily restrictive regulation."

The report also calls for organisations involved in self-regulated fundraising to adhere to the five principles of effective regulation, laid out by the UK Better Regulation Taskforce in 1997.

These are proportionality, accountability, consistency, transparency and targeting.

The report argues that the UK system is not sufficiently targeted, giving the example of the Fundraising Preference Service, a system set up after the 2015 fundraising scandals that allows people to block contact from specific charities by phone, text, email or post.

"By providing an opt-out to everyone – not just those in need of protection – the regulatory intervention in the form of the FPS was not targeted at the specific problem," the report says.

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