Earlier this year, the fundraising community in the United Kingdom faced complaints after a British newspaper reported that Olive Cooke, a 92 year-old woman who volunteered to sell poppies in the weeks running up to Remembrance Day, had ended her life because she had been “hounded to death” by fundraisers. Although the women’s family clearly stated that this was not the case, the very sad situation led to inquiries by the UK Fundraising Standards Board (“FRSB”) (the independent self-regulator of fundraising in the UK) and the British Parliament, and to the introduction of a new bill before the British Parliament addressing fundraising issues. In addition of this, a cross-political party committee recently published a report on fundraising regulation in the UK, which contains other recommended measures. All of this was done in an effort to help restore public trust in charities.
How is this relevant in Canada? Stories today travel and new issues in one country tend to become new issues in another country. Knowing this story could potentially help ensure that Canadian charities will not have similar problems.
The initial results of the FRSB inquiry call for giving private citizens more control over the way that charities communicate with them, making it easier for people to opt out of unwanted contact. The report also identifies areas of the Code of Fundraising Practice (a set of fundraising standards designed by the Institute of Fundraising, a professional membership body for UK fundraising) that could be strengthened to address public concerns. These include:
- greater clarity about the rules for gaining donor content/information;
- limits on the frequency with which charities approach donors;
- expansion of current guidance for communicating with older supporters and those in vulnerable circumstances; and
- elimination of the current allowance that fundraisers can use “reasonable persuasion” when dealing with donors.
The Parliamentary inquiry was launched on July 21, 2015 by the Public Administration and Constitutional Affairs Committee of the UK House of Commons. In particular, the Committee is looking into concerns surrounding call centres contracted by charities to raise funds on their behalf. The inquiry is focusing on four key areas:
- the extent and nature of practice adopted by call centres raising funds for charities and the impact on members of the public, particularly vulnerable people;
- the UK Government’s recently proposed legislative changes on this issue;
- how charities came to adopt these methods, and how they maintain proper governance over what is being done on their behalf; and
- the leadership of charities and how their values are reflected in their actions and activities.
Several UK charities have submitted written evidence to the Committee and in early September, the Committee heard oral evidence given by the chief executives of several of the UK’s largest charities, including Oxfam, the National Society for the Prevention of Cruelty to Children, Save The Children, and the Royal Society for the Prevention of Cruelty to Animals. In general, the executives agreed that they are failing to properly monitor their telephone fundraising agencies and that fundraising regulation in the UK needs a statutory underpinning. The chair of the FRSB also gave evidence to the Committee, criticizing the Code of Fundraising as too weak. The chair advocated that the Institute of Fundraising be stripped of responsibility for setting such standards, and that such standards should be set by an external committee that does not have any vested interest in the fundraising sector.
The Committee has yet to publish any initial or final conclusions.
New Legislative Bill
The new Charities (Protection and Social Investment) Bill introduced before the UK Parliament, addresses fundraising by charities and other charities-related issues. As it is currently worded, the Bill will require all agreements between professional fundraisers and charities to set out what steps they are taking to protect vulnerable people and other members of the public from certain behaviours, including: (i) unreasonable intrusion on a person’s privacy, (ii) unreasonably persistent approaches for the purpose of soliciting or otherwise procuring money or other property, and (iii) placing undue pressure on a person to give money or other property. In addition, charities with gross incomes exceeding £1million will need to state their fundraising approach in their trustees’ annual report, including the use of fundraising agencies, as well as what the charity has done to protect vulnerable people and other members of the public from the behaviour noted above.
National Council for Voluntary Organizations Review
This past summer, Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organizations, chaired a cross-party review of fundraising regulation at the request of the UK Parliament’s Minister for Civil Society. The findings were published towards the end of September in a report titled “Regulating Fundraising for the Future: Trust in charities, confidence in fundraising regulation.” The report emphasizes that fundraising needs to:
[M]ove above and beyond regulation and compliance, from simply doing things right to also doing the right thing. Charities need to view and approach fundraising no longer as just a money-raising technique, but as a way in which they can provide a connection between the donor and the cause.
The report concludes that the FRSB has been ineffective in regulating fundraising and has lost the confidence of both the public and charities. It recommends that the FRSB be replaced with a more powerful body that has the public interest as its central concern. Such a body would likely be a hybrid statutory-self-regulatory one. The report suggests that the new regulatory body set its own standards regarding good fundraising practices and criticizes the current regime of standards-setting by the Institute of Fundraising as an inappropriate arrangement that has damaged fundraising regulation and is not in the public interest. The report advocates that the fairest, most effective approach to funding the new regulatory body would be a levy on fundraising expenditure. Such a levy would apply to charities that spend £100,000 a year or more on fundraising from the public. The levy would increase according to the amount spent by a charity on fundraising, such that those that spend more would make a greater contribution. The new regulator would regularly report to the UK House of Commons to which it would also submit its annual report, ensuring that the government has ample opportunity to scrutinize its work.
Another key conclusion of the report is that more effective sanctions are necessary. The new regulatory body should have a wider array of sanctioning powers including naming and shaming, cease and desist orders, compulsory training and clearance of future campaigns, among other powers. The report specifically does not recommend fines on charities on the basis that fines primarily harm donors and beneficiaries.
A key finding regarding members of the public is the lack of control over how and how many times they are approached with fundraising requests. To address this, the report proposes the creation of a “Fundraising Preference Service” (“FPS”) under which the public could more easily opt-out of communications from fundraisers. The service would be overseen by the new regulator. It would provide convenience to the public in being able to opt-out of contact by several charities at once, without having to contact each charity separately. Charities would be responsible for screening their donor lists against the data on file with the FPS.
Finally, the report argues that trustees and chief executive officers of charities have not been taking an active enough role when it comes to ensuring compliance with existing fundraising rules. Trustees and chief executive officers need to take primary responsibility to ensure compliance with fundraising rules and should ultimately be held responsible for ensuring that their charity acts ethically in all activities, including fundraising. To help achieve this, the report supports the amendments to the Charities (Protection and Social Investment) Bill requiring trustees to make a statement in their annual report setting out their approach to fundraising as well as indicating what the charity has done to protect vulnerable people and other members of the public from undue fundraising pressure.
If all the changes that are currently being put forward in the UK were implemented in Canada, they would represent significant changes to the way Canadian charities are required to report on their fundraising activities. In some instances, the changes could fundamentally affect the way a charity carried out its fundraising activities. Nevertheless, some of the UK proposals are good practice, such as avoiding the use of aggressive fundraising tactics and taking steps to ensure that vulnerable people are not subject to undue fundraising pressure. This comes from knowing who is the target of a particular fundraising activity and how that activity might affect the potential donor. At the very least, Canadian charities should have regular conversations with their staff, volunteers, and third-party fundraisers about good fundraising practices, as well as any fundraising policies that might be in place.