One of the aims of the new Charities Act is to maintain public confidence in charities. Improving the regulation of fundraising is key to fulfilling this objective.
Part three of the Act covers new arrangements for public collections.
It introduces greater transparency in regard to remuneration for "commercial participators" - professional fundraisers and businesses that raise money for charities. It also gives the Secretary of State "reserve powers" to regulate charity fundraising if necessary.
Some fundraising methods, such as collecting direct debits on the street, have attracted bad press, and the Act covers solicitation of direct debit and standing orders. All charities wishing to take a significant collection will have to obtain a public collections certificate from the Charity Commission. The legislation aims to provide a clear and consistent national framework that strikes a balance between allowing responsible fundraising on the one hand and reducing the potential for bogus collections on the other.
Another objective is to resolve the ambiguity surrounding statements made by professional fundraisers about the proportion of donations going to charity. Commercial participators will no longer be able to state in "general terms" the amount to be received by a charity. Instead, they will have to specify a "notifiable amount", such as 10p per product sold.
Furthermore, paid in-house charity fundraisers will be required to disclose their remuneration for the first time, which will place them on an equal footing with their external counterparts.
The system of self-regulation currently being developed has been designed to improve charity fundraising standards and to unify public charitable collections. The Fundraising Standards Board has been established to monitor members' compliance with the Institute of Fundraising's codes of practice and to introduce a consumer-facing complaints procedure.
The Government's regulatory power over charity fundraising is limited because it believes self-regulation should be the first resort for improving fundraising practice. It is hoped that the sector will embrace self-regulation so that it can drive up standards itself.