Distilling 29 pages into 5
Following the Fundraising Regulator’s first consultation on the Code of Fundraising Practice, they have now released changes to the Code along with details of the sector and public consultation responses. Their document runs to 29 pages, so in about five pages, this blog summarises the main outcomes to help you identify key issues for your own organisation.
The amends to the Code fall into two main areas. I’ll be summarising key points from the new version of the Code and associated rationale from the regulator. I’ll also make clear the Regulator’s expectation of when charities will have adopted the new rules.
Governance, policy and oversight: Code recognises Trustees’ governance responsibility for fundraising; Policy and practice for fundraising and vulnerable people; Whistleblowing in relation to fundraising matters.
Conduct of fundraising: Additions to the rules on maximum number of donation asks. At what stage must a solicitation statement have been given in a fundraising call? What standards does the Code expect for the content and monitoring of contracts with professional or third party fundraisers? Minor changes to the rules around clothing collection bags.
Governance, policy and oversight:
Charity TRUSTEES: responsibility for fundraising governance. Code 1.2
What’s changed? The code now includes a requirement for trustees to ‘have regard to national guidance in overseeing the fundraising activities of their charity and any [relevant] third parties’. The Code references guidance applicable in England & Wales, in Scotland and in Northern Ireland.
Implement by: Immediately – 31 July 2017 – the Regulator notes that charities should already be following governance guidance issued by the Charity Commission, OSCR or CCNI as appropriate.
Comment: The Regulator stopped short of recommending that Boards appoint/nominate a trustee with responsibility for fundraising and compliance. They felt that recommending this would detract from the key message – that fundraising governance is a whole board responsibility.
In my work helping trustees get up to speed with fundraising governance and the wider regulatory environment for fundraising, I am disturbed by the number of Boards and trustees with little or no awareness of CC20 (my work is mostly in England) or of the principles it sets out. If you’ve not done so yet, encourage your Board to read and discuss the guidance – and make sure it is part of your induction process for new trustees. (See also my earlier blog for more trustee induction thoughts.)
People in vulnerable circumstances
What’s changed? No change to existing guidance – existing rules deemed adequate.
Implement by: Existing guidance – you should be complying already.
Comment: I have included this in the Governance Policy and Oversight section as, considering the recent history of fundraising practice, how your charity treats vulnerable people should be a core governance issue. Indeed, it is one of the areas larger charities are required to report on under changes to reporting requirements brought in by the Charities Act 2016. However, it is also relevant to the Conduct of Fundraising section, and could equally sit there.
The Regulator’s purpose was to check that existing regulations are effective and adequate. A high proportion of respondents thought so. The challenge for trustees and management teams is that the rules regarding the treatment of vulnerable people are scattered through the Codes. (Please do let me know if you think a blog drawing the strands together would be helpful.) In summary, we are required to treat donors fairly, considering the needs of those who may be in vulnerable circumstances, and of course should not exploit vulnerability or credibility. We should not take donations from those we suspect lack capacity to make a decision. Charities large enough to require an audit must state in their annual report what they have done to protect vulnerable people.
The Code signposts the Institute of Fundraising’s Treating Donors Fairly, but does not draw its content into the Code. It is for charities – and their boards – to consider how they will respond, and what training they will ensure their fundraisers receive. The discussion notes suggest that charities may wish to track cases where they have identified vulnerability to see what action is taken and whether further financial asks are blocked. Blocking would be a bit of a sledgehammer response – not all vulnerability is permanent. See further notes on vulnerable people in the section on the fundraising ask, and working with third parties later in this blog.
Raising concerns about fundraising PRACTICE: whistleblowing
What’s changed? Charities are required to have a clear, published internal procedure for staff and volunteers to report any concerns they may have concerning their organisation’s fundraising practice.
Implement by: 30 November 2017
Comment: The Regulator accepted suggestions that the whistleblowing procedure could be part of the organisation’s wider whistleblowing procedures rather than standalone. The regulation tells us that Charity policies should define:
- The type of issues that may arise, and process for reporting
- How the whistleblower will be protected from victimisation or harassment
- How and what the organisation will do in response
- How the matter can be escalated if it cannot be resolved internally.
Conduct of Fundraising
The fundraising ask
What’s changed? (i) A rule already in force for door to door and street fundraisers has been extended to other forms of person to person fundraising: that no further ask should be made if a person clearly indicates by word or gesture that they do not wish to continue to engage (1.2g). (ii) 1.2g has also been extended so that fundraisers must not persist with a financial ask if they have reasonable grounds for believing that the individual is in vulnerable circumstances which means they are unable to make an informed decision to donate. (iii) The three asks rule for telephone calls (8.3) has been clarified: it limits financial asks to three to differentiate between those and ‘donations’ of time or action.
Implement by: For section 1.2g relating to indications that people do not wish to engage, and regarding vulnerable people, the deadline is 30 Sept 2017 to allow time for training. The change to telephone calling rules in 8.3 is a small clarification and organisations should already be applying the 3 ask maximum rule – so no grace period for this.
Comment: I am pleased to see the Regulator to go to some lengths to show that it will not interpret ‘financial ask’ too broadly. ‘£5 a month could pay for xyz’ is information, not an ask. But ‘Could you give £5 a month to pay for xyz?’ is. The ask is the point at which money is requested. The Consultation review notes the part that conversational questions play in such conversations, and if there is no financial ask buried in them, then they are not counted towards the three. The Regulator also stresses that the three ask rule is for telephone fundraising calls, not other conversations.
There is some nervousness from respondents about the exercise of judgement needed to interpret whether a gesture or word is a clear indication of a wish to cease engagement. Here the Regulator does rather fall back on ‘it depends’ thinking: the regulator would consider the strength of evidence supporting or refuting a breach, on where it thinks the balance of probabilities lies.
Timing of solicitation statements
What’s changed? The rule has (4.2 e) is now clear that the disclosure or solicitation statement should be made before money is given or financial details relevant to the transaction are requested by the fundraiser. Existing rules and legislation about the content of the statement is unchanged in each jurisdiction.
Implement by: 30 November 2017 allowing time to cascade to fundraisers, amend scripts and revise training.
Comment: This has occasionally been a difficult area with some callers tagging the solicitation on at the very end of a call, after bank or card details have been collected. Some responders thought the new rule unnecessarily restrictive, denying fundraisers the flexibility to include the statement at the most appropriate moment in each call.
The new rules encourage transparency – but it will be interesting to see evidence of their impact on conversion over time.
Third party fundraisers
What’s changed? The Code has long expected charities to check and make all reasonable efforts to ensure the ongoing compliance of third parties with the Code and legal requirements. The amended Code sets out considerable detail of what those checks and reasonable efforts should look like. The new rule requires charities to ‘make all reasonable efforts and exercise due diligence to ensure compliance’. It further defines how reasonableness should be interpreted: is it delivering effective and proportionate monitoring? The code sets out 10 benchmarks for how that reasonable effort may be evidenced. See comments section below for more information on these, and the rule 4.2 here, for the detail. The amends also explicitly require fundraising agreements to include compliance and monitoring measures as required by the Charities (Protection and Social Investment) Act 2016.
Implement by: Immediately (31 July 2017) because charities should already be making ‘reasonable efforts’ to ensure compliance by third party fundraisers.
Comment: This section is not rocket science, but compliance may demand more time and effort than some organisations have typically been able to bring to monitoring their third party fundraisers, contributing to the well documented problems the sector has been facing. Top of the list is ensuring that the values of charities are reflected in policies, performance objectives and indicators of the third party organisation. Trustees have a key role here: have they worked with their organisations to clearly articulate those values, so that their staff can train others in them? The code suggests also that establishing a named individual with responsibility for monitoring compliance is important. Other indicators relate to reporting, monitoring, training review, mystery shopping, complaints arrangements, whistle blowing (see above) and the need to agree action plans where remedial action is necessary.
I would urge fundraising directors to consider the impact of compliance with the Code and ensure that fundraising team budgets and staff levels build in room for these more explicit examples of what the Regulator would consider ‘reasonable efforts’.
What’s changed? The Code now states that charities conducting house to house bag collections must not deliver to houses that clearly display signs saying no charity bags or no clothing bags – or similar wording.
Implement by: 30 September 2017
Comment: The Regulator has accepted representations that many people do not view charity bags as ‘junk mail’ and has not included that wording in the rules. They have not brought in a compliance monitoring rule at this time, but may do so depending on future complaints about non-compliance.
Overall this is a sensible and well constructed set of changes. The changes add clarity in some areas that were too open to interpretation (for example the timing of the solicitation statement), and give much needed clarity over the sort of things that charities should be doing in setting standards for and monitoring third party fundraisers. This will be particularly helpful for smaller fundraising teams who often find themselves reinventing the wheel.
I do have concerns about some areas that lack clarity: the interpretation of word and gesture that may or may not mean ‘leave me alone’, whether the pragmatic charity bags are not junk mail guidance will leave the door open to further complaints. We will need to watch adjudications to see how this pans out in due course.
If I had to draw a major theme or two out of the changes it is these – and both are directed at trustees and SMTs:
- The importance of trustees having a clear sense of the values of their organisation, to communicate these explicitly to staff to ensure that staff in turn can set the expectation for third parties, volunteers and anyone fundraising on their behalf. Nowhere in the rules does it say these must be written down – but I recommend the question should be considered by all boards.
- The C word comes up a lot in the document: Compliance. How will your charity demonstrate compliance with the Code of Fundraising Practice? In my parallel work in the financial services sector, the FCA is adamant that absence of complaints does not mean clients are being treated fairly. Equally in our charity sector, complaints should not be our canary in the mine. We should be considering proactive ways to assess and demonstrate compliance – it is for Boards and SMTs to work together to consider how this will be done.
Additional information: Fundraising Regulator Summary & Code Changes (pdf)