The new fundraising regulations proposed by the government will be expensive for charities and ineffective in terms of changing their behaviour, Lord Hodgson of Astley Abbotts has said.
But the proposed measures – which take the form of amendments to the Charities (Protection and Social Investment) Bill, which is currently making its way through parliament – will push fundraising self-regulation harder and "up the game" for charities, the Conservative peer told Third Sector.
Hodgson, who carried out the government review of the Charities Act 2006, said he believed statutory regulation should be a last resort for the sector. The government’s proposals were unlikely to be effective because the fundraising scene changes so fast, he said. "When I did my review it was chugging that was the issue; now it’s telephone fundraising," Lord Hodgson said.
In time, he added, people were bound to complain about the amount of money charities were wasting in having to comply with the rules.
But he said he approved of the bill in the sense that it would sharpen up charities’ annual reports and "up the pressure" on the self-regulatory bodies to improve standards.
Hodgson said he intended to meet Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, who has been charged by the government with conducting a review of fundraising self-regulation.
He said he would tell Etherington that there should be only one body for self-regulation. Charity fundraising is currently regulated by the Fundraising Standards Board, the Institute of Fundraising and the Public Fundraising Regulatory Association.
This single body should have responsibility for checking that charities were complying with the new reporting requirements set out in the regulation, he said, and the Charity Commission should have to step in only where there were serious rule breaches. "The Charity Commission should have to act only as a back-stop," he said. "Otherwise the system will have failed."
Hodgson said the government needed to be mindful of the need to preserve the right of charities to ask for donations. "If we’re not careful, we’ll get to a position where charities can’t ask," he said. "Unreasonable restrictions will cause charities’ income to fall."
Any new system for self-regulation should not prevent volunteer fundraisers from doing work in their local communities, he said. "Mission creep can happen quite quickly," he added. "I will tell Etherington that he needs to think about what is going to encourage local initiatives to continue."
The Institute of Fundraising said it planned to engage with Etherington’s review of the self-regulatory system. Peter Lewis, chief executive of the IoF, told Third Sector it was clear that the system had not been as strong as it could have been despite efforts to make it work.
"While it is absolutely true that the number of complaints is low compared with the number of asks, I don't think using that as a justification for maintaining the current regulatory system will cut the mustard any more," Lewis said.
Now was the time, he added, for the IoF’s members, and those of the FRSB, the PFRA and the Charity Retail Association, to set out what they wanted from self-regulation.
"I personally hope that it is something fit for the 21st century," he said. "We need an agile and professional system of self-regulation that fully embraces the digital age and is able to take bold and brave decisions. A system that can not only hold us to the standards we aspire to, but also has the credibility to report back that standards as a whole are high."