It
seemed like a good idea at the time. When the Queen’s
speech in 2003 announced new rules to ensure donors were told
how much of their gift went to pay the fundraiser, there seemed
to be little opposition.
In fact, the sector’s ire was largely reserved for The
Times and other newspapers that chose to focus on what
Andrew Watt, the Institute of Fundraising’s head of
policy at the time, not unreasonably described as “a
miniscule part” of the Charities Bill.
“What it highlights is the need for clarity about the
method of recruitment and what it costs,” he added.
The Public Fundraising Regulatory Association meanwhile said
it was “right that proposed legislation [would] provide
an opportunity to regulate for modern fundraising methods”.
Four years down the line, though, and there seems less support
for the regulations that came into force this April and have
been variously described as “confusing”, “misleading”,
and “unworkable”.
Partly, this is because many fundraisers seem to have been
taken by surprise. Despite the long lead-in, Allan Thompson
at the National Deaf Children’s Society, for example,
admits that the new regulations only really came to his attention
a few months ago. “It almost seemed to come out of the
blue,” he says. Yet the charity gets about 80 per cent
of its income from face-to-face and door-to- door fundraising.
Nor is he alone. “It took us by surprise,” agrees
the director at another big user of face-to-face, despite
the fact that it even has its own in-house team.
At the PFRA, though, Mick Aldridge says it can’t be
accused of under-estimating the significance of the regulations
proposed all those years ago. When the Charities Bill was
going through, he says, his organisation’s attention
was on securing face-to-face fundraisers equality of access
with cash collections, which it achieved.
“We knew right from the start that the issue of fundraising
statements was going to be a hot potato,” he says, “but
we didn’t have the resources to fight a battle on two
fronts. We assumed the telemarketing industry or Institute
of Fundraising would take that up.” But the Institute
says that, in principle, it actually supports the move.
“This was all about trying to improve accountability
and transparency, and trying to make the public aware that
it does cost money to raise money,” explains its present-day
director of policy, Megan Pacey. If it is now less certain
about the change, that’s only because it is not convinced
that these aims will be achieved, she says.
In any case, there is little use now in crying over spilt
milk. As Pacey puts it, “It won’t be repealed
so we’re stuck with it. We have to give it a chance.”
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Learning to live with it
And for face-to-face at least, complying isn’t too
hard. The new “solicitation statements”, after
all, are only an addition to the existing disclosure fundraising
agencies had to make anyway.
As Rupert Tappin, MD of Future Fundraising, puts it: “We
used to have one sentence about this on the direct debit
form; now that’s three sentences. It adds about 10
to 20 seconds.” It’s far too early to tell what
the impact will be, of course, but to date there has been
no discernible difference in the results, he says.
The same is true at NDCS. Thompson says that in the limited
period the new solicitation statements have been used there
has been no effect on the numbers recruited or average gift.
In fact, long-term, he even hopes the new rules could encourage
retention by making it clear to donors that the return on
investment from the medium is partly determined by how long
they continue giving.
“To a certain degree it puts the onus onto them to
keep on giving,” he explains.
This is an idea the PFRA has been keen to promote, emphasising
the opportunity the new statements provide to explain the
return on investment the charity expects and difference
the donations can make – something it pushed hard
to ensure the sector would have the flexibility to do.
Indeed, as Adam Rothwell, features editor at donor-advice
website Intelligent Giving points out, since the sector
frequently complains that the public have little conception
about how modern fundraising works, charities should not
whinge too much about regulations that help tackle just
that problem.
“If the public don’t understand charities then
that’s because charities haven’t been explaining
themselves well enough,” he says. “That’s
the only possible reason.
“It’s not really good enough to complain about
being misunderstood and then not embrace the opportunity
to explain yourself.” He does, however, acknowledge
that there are weaknesses with the new rules.
Not least of these is the perceived unfairness, and even
if the new rules have not had an effect, some face-to-face
fundraisers do feel unfairly singled out.
“There are costs associated with any fundraising,
so surely we should be transparent about the whole lot,”
argues Tappin. “I think we should give it a little
more time to see how it works, but then we should look at
whether we want a level playing field, because at the moment
we’re really out on a limb.”
Others also fear that, if income from face-to-face does
fall, it won’t be because donors really understand
fundraising better, but simply because they will have been
misled. As Alan Gosschalk, director of fundraising at Shelter,
explains, telling people the costs behind face-to-face fundraising
doesn’t necessarily mean that they will have any better
understanding of the costs associated with, say, running
a charity shop.
“It would be very sad if, by being transparent about
one form of fundraising, people were less likely to support
it in the mistaken believe that others were much more effective,”
he argues.
Looking elsewhere
The biggest problems, though, aren’t those for face-to-face.
Apart from anything else, telephone fundraisers face a more
difficult time in not having the option of simply referring
prospects to written details, and some say many have yet
to really establish how exactly they should comply with
the law.
More problematic still, says the Institute of Fundraising,
is payroll giving where agencies are involved. “It’s
an enormously complicated statement that they have to make,”
explains Pacey. The problem, she says, is that the legislation
is really framed for face-to-face fundraising, but applies
across a whole range of activities. “One size doesn’t
fit all,” she says.
Of course, there are some who say they have argued this
from the beginning. Geoff Howard at the Association of Fundraising
Consultants, for instance, points out that under a strict
reading of the legislation, agency staff have to disclose
their pay and calculate the cost of their time even for
ringing donors regarding “a wrinkle in their direct
debit form”.
In 2006, the AFC commissioned a legal opinion from Anne-Marie
Piper, chair of the Charity Law Association that concluded
the rules should be scrapped. “We could see this problem
coming prior to the legislation,” says Howard. “It
was patently unworkable.” The only way he sees the
legislation being of use is if charities ignore it in certain
circumstances – hardly a sign that it is well drafted,
he points out.
In time, of course, it is true that these problems are likely
to be ironed out – particularly once the government
has had a chance to consider results of the consultation
on the guidance it has provided on solicitation statements.
In fact, despite the Office of the Third Sector’s
insistence that it was important for fundraisers to have
experience of using the statements before responding to
the consultation, most believe it would have been better
to conclude this before the law came into effect.
However, therein lies perhaps the greater danger: that some
will be tempted to simply wait for the results of the consultation,
which will be months away and could even drift into next
year. That, says Aldridge, would be a mistake.
“Do you really want the government to hand it down
line by line?” he asks. Charities have been given
some flexibility about what they can say, he notes, and
they would be wise to take it.
Indeed, the biggest effect of the new regulations and the
hassles they have caused may be to prompt charities to take
the threat of government regulation seriously. As Pacey
puts it: “This is a good reminder why we don’t
want to go down the regulatory route any further than we
have.”
Given the recent warning from charities minister Phil Hope
that many more organisations must join the Fundraising Standards
Board to convince the government that self-regulation is
working, that may be no bad thing.
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