Long before the suicide of Olive Cooke, a 91 year-old volunteer, unearthed evidence of bombardment of vulnerable people by fundraising agents, the chugging business model and use of direct mail have been questioned. Even though Olive Cooke’s family denied that charity harassment had triggered her death and GoGen and other charity cold-calling centres went out of business in days, it was the last straw.
Ministers, the Daily Mail and the charity sector’s representative institutions, notably NCVO, seized the moment to make charity leaders get their house – and their outsourced agencies – in order. There’s universal agreement that radical change was overdue. Where there is vehement disagreement is around the logic and effectiveness of the reaction; be in no doubt that a new regulatory structure is being installed, and it will affect your organisation if it spends more than £100,000 on fundraising.
When self-regulation becomes self-harm
Asked by the Minister for Civil Society to assess self-regulation, the NCVO’s Sir Stuart Etherington and three Peers made radical proposals, starting with replacing the Fundraising Standards Board (FRSB) – the incumbent selfregulatory body sanctioned by the Charities Act 2006 – with a new Fundraising Regulator.
Let’s be honest about the FRSB’s lousy start. It launched late due to a lack of big members, and its constitution was described as “rubbish” even by supporters. It was not actually self-regulation by members but subscription to a tribunal of the worthy. Yet Sir Stuart, and impatient politicians that have pushed through the Fundraising Regulator, have badly underestimated the difficulty of setting up new regulatory institutions – as any observer of post-Leveson press regulation would conclude.
Etherington’s best ideas could easily have been invested in a revamped FRSB. Eschewing fines (which only ever harm beneficiaries) is wise. Putting erring trustees and directors on the hook for compulsory training, public censure and ‘cease and desist’ orders will drive leaders to take charge of all their fundraising methods. Adding accountability to a select committee of Parliament is easily done if the Public Administration Select Committee is willing.
However, we now have the looming prospect of a new entity “building its own reputation as a strong regulator”, making its presence known in front of expectant politicians and media. Michael Grade, the former broadcasting chief and the Fundraising Regulator’s inaugural Chair, has already puffed his powers, warning charities guilty of serious fundraising misconduct that they could have charitable status removed. Correctly this earned a reminder from the Charity Commission that this is an existing power reserved only to the Commission for organisations that are not charitable. Overzealous measures and set-piece show trials are something charities can ill afford.
‘May you live in interesting times’ is a curse
The proposal for a Fundraising Preference Service (FPS) to halt the flow of fundraising communications is a different order of challenge. It’s illiberal and technically fraught. The current statutory Telephone Preference Service struggles to contain market research calls and robo messages.
The head of FPS’s working group, George Kidd, is eminently well qualified in direct mail compliance and premium-rate telephone services. Whilst we might agree that the Data Protection Act is a little soft (eight large charities were contacted by the Information Commissioner in 2014 in response to a handful of minor complaints) surely he knows that stronger medicine is already on its way from the European Commission. EU Data Protection Directives will restrict communication to donors that actively opt in, adding a ‘right to be forgotten’ where donors can be removed from charitable databases forever. Why invent a complicated duplication – and risk another ‘public sector IT’ disaster?
FPS augurs a ‘single reset button’; effectively granting members of the public annoyed by one fundraiser an inviolable right not to be interrupted by any fundraiser. Public support in surveys is high, but how many know that the system is not being designed to “switch off” pests one by one? Blanket blocks could have a chilling effect on civic discourse.
The cost in database management (estimated at £6,000 – £10,000 per year) and lost voluntary income (25% – 50% of individual donations) will squeeze frontline charitable services further.
Category errors and collective punishments
In my view, some of these flawed reactions stem from flawed judgement on the cause of the problems. The response wilfully misconstrues the Olive Cooke issue. One charity sending a single letter to a donor is not a scandal. Collectively there was a problem as the number of charities became an inundation for a kindly old lady who rarely said no. If the real problem is something else – out of control contractors selling private data, for instance – then that demands a different fix. It’s hard to see how sophisticated technical devices will protect frail and vulnerable donors.
Whilst banks, despite endemic failures of governance, judgement and incentives that nearly brought the world to its knees, have retained principles-based regulation, for charities, general threats of “reputational” harm and loss of “public trust and confidence” are sufficient to trigger the Charity Commission and the Fundraising Regulator. William Shawcross, the Charity Commission’s Chairman, has even used surveys showing that admin costs concern the public more than the positive difference charities make to widen his public trust remit. This is extraordinary mission-creep from a regulator tasked with upholding charitable objects and complains its budget has been halved.
No-one at the top seems to have stepped back to see that reliance on detailed rules, such as the Code of Fundraising Practice, is expensive to regulate, impossible to keep relevant, and ends up being complicit with abusive loopholes. Rules are just a best guess on future practice.
You’ve done nothing wrong, but you need to be fined and tagged
Timely work by NFPSynergy and Stone King’s lawyers shows that the Fundraising Regulator is neither statutory nor voluntary. Take that in for a moment. “Self-regulation” may be the label, but compliance will be compulsory.
Do’s & Dont’s
So away from the regulatory brouhaha, what can Trustees and Fundraisers do to promote fundraising in their charity?
- The buck really does stop with the Trustees.
- Tactics do matter and public opinion and experience must come first. Don’t do anything you wouldn’t go on the Today programme to represent.
- Don’t waste a good crisis. It’s time to refresh your Board and renew expectations. Fundraisers need a voice.
- Your Board should be willing to experience your charity as ‘punters’, donors and mystery shoppers.
- Get a handle on all your data. Even if the Fundraising Preference Service takes time to set up, the EU Directive is coming.
- Talk to donors, and then talk again: Charities can’t just outsource these calls to agencies and then plead ignorance about the tactics – remaining in touch and checking the experience of donors regularly is vital.
- Mass broadcast methods by post, email and phone are going to be constrained and costly. It’s time to think through your best alternatives – simple trading models, corporate partnerships, community events, and legacies are going to play a bigger part of your working week.