INSTITUTE OF FUNDRAISING: Self-regulation is the way to keep public confidence

Lindsay Boswell is chief executive of the Institute of Fundraising

The Government has recently undertaken reviews of charity law and the operation of the voluntary sector. This began with the Strategy Unit's consultation document Private Action, Public Benefit in 2002. In the Government's response - Charities and Not-for-profits: a Modern Legal Framework - it was suggested that more formal self-regulation was the next step, with powers given to the Home Secretary to introduce statutory regulation if self-regulation fails to work. This article sets out the Institute of Fundraising's proposals for self-regulation.

The Institute does not accept that, as yet, there is a clear downturn in public confidence affecting the sector. However, we also believe that maintaining or enhancing levels of confidence is so vital to the work of the voluntary sector that a 'wait and see' approach is potentially dangerous. We further believe that the sector is unlikely to notice adverse changes in voluntary income accurately or quickly enough to take corrective action in time to stem a decrease in income. Therefore, if there are steps we can take now to maintain or increase confidence, and the cost and burden of such a scheme are balanced by the benefit, then we have a duty to do so.

Rodney Buse is conducting an inquiry into possible models of self-regulation.

The Institute asked him to set up a commission to consider the issues surrounding self-regulation that is independent of Government, but fully involves the sector. He will report in early 2004.

If change is needed, we believe there should be two separate bodies overseeing self-regulation. One to set standards and engage with fundraising organisations through membership.

The other to act as a reactive arbitrator of complaints about fundraising practices. The former would be the Institute of Fundraising, while the latter should be a new, independent body. The complaints body should be independent of the fundraising community in order to have the confidence of a complainant, and have access to expert opinion from a panel of fundraising professionals.

One code for all

The Institute has for many years now published Codes of Fundraising Practice, and organisations have voluntarily signed up to these. The most logical and cost-effective way to develop a system of self-regulation is to build on this work. The principle of one set of codes to which all interested parties contribute should continue.

Membership should be open to all organisations engaged in the fundraising process. Other bodies should feed into specific codes of relevance to their area of expertise. Codes of other umbrella bodies should come within the over-arching Codes of Fundraising Practice.

More work needs to be done to define the relationship between the Institute and the complaints body. The Buse Commission can usefully develop thinking in this area.

There would need to be a clear, well-defined and close relationship between the self-regulatory structure and the regulators, the Charity Commission and bodies in Scotland and Northern Ireland. A donor should not be expected to know where regulation stops and self-regulation starts.

There would need to be a concerted campaign to raise awareness of the self-regulatory scheme. It is only through public awareness that such a scheme can really have a major impact. This is an area where government support would be necessary through the provision of seed-corn funding.

The Institute wishes to see the initial funding to market the scheme and the permanent funding for the complaints body coming from the Government.

A mark or symbol should be developed that would be used to communicate to the public that the organisation had signed up to best practices. The trustees of each organisation would have to make a signed declaration at each AGM that they agree to abide by the Codes of Fundraising Practice, entitling them to display the quality mark.

The Institute believes that these proposals provide the outline of a scheme that helps fundraising organisations to strive towards best practice, strikes the right balance between cost and benefit of compliance and, most importantly, maintain donor confidence.

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