On 1 November 2016 the new fundraising rules for charities came into force, and the Charity Commission and the new Fundraising Regulator have jointly issued FAQs to help charities understand if and how they are affected by the changes.
The changes affect charities that engage with commercial participators or professional fundraisers, and larger charities who are required to have their accounts audited (currently only applicable to charities with an annual income of £1m or more, or those with assets worth more than £3.26m and an annual income of £250,000 or more).
A commercial participation agreement is required whenever a charity engages in a public fundraising initiative with a business. An example would be if a company selling bottled water agreed to donate 25p from every bottle sold to a charity working on providing clean water to people living in poverty in the developing world. Any arrangement of that kind must be set out in a written agreement between the charity and the business (known as a ‘commercial participator’ in this context). Similarly, whenever a charity engages a professional fundraiser to carry out fundraising activities (such as street fundraising or door to door fundraising) the arrangements must be set out in a written agreement between the charity and the professional fundraiser.
The new rules require additional information to be included in agreements with commercial participators and professional fundraisers relating to how the commercial participator or professional fundraiser will protect vulnerable people and other members of the public from unreasonable behaviour when carrying out their fundraising activities, and how the charity will monitor compliance with these requirements.
For larger charities who are required to have their accounts audited, the new rules require their annual reports to include additional information specifically relating to fundraising activities of the charity, including how fundraising is carried out, how the charity has monitored any activities of commercial participators or professional fundraisers, the number of complaints received about fundraising activities and what the charity has done to protect vulnerable people and other members of the public from unreasonable behaviour.
The new rules have been introduced in the wake of concerns about the prevailing lack of public confidence and trust in charities. The changes are not unduly onerous for charities and the Charity Commission says that they are intended to “help charities to demonstrate their commitment to protecting donors and the public, including vulnerable people, from poor fundraising practices”. Recent research published by nfpSynergy suggests that increased transparency about how donations are spent and the impact of those donations is likely to improve charitable giving. It is hoped that the programme of reforms to the fundraising regulatory landscape will assist to increase public trust and confidence and, in turn, lead to increased charitable giving.
The content of this article is for general information only. If you require advice on entering into a commercial participation agreement or professional fundraising agreement, or you would like guidance on how to satisfy the new reporting requirements, please get in touch with Liz Brownsell or another member of Birketts’ Charities Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at November 2016.