Amidst the political and economic uncertainty across the UK comes a positive message reaffirming trust and confidence in fundraising practices in Scotland. As of 7th July 2016, fundraising regulation in Scotland has changed with the implementation of an enhanced model of self-regulation.

The Need for Change

As we blogged on previously, reports both north and south of the border described a ‘grumbling discontent’ amongst the public about fundraising practices across the United Kingdom. The Scottish Charity Regulator (“OSCR”) survey of public attitudes toward charities in March 2016 highlighted that a third of respondents reported their trust in charities was decreasing. The percentage of people who were very concerned about charity fundraising methods had risen from 15% in 2011 to 26% in 2016. Aggressive fundraising tactics, a fear of donations not going to the correct place, and cold calling were the fundraising issues that most concerned respondents. There have also been concerns and regulatory action taken in respect of the use of data and information held by charities – this is something our Technology team have blogged on before.

The perceived lack of trust by the public in some fundraising practise prompted the Scottish Council for Voluntary Organisations’ (“SCVO”) informal review in Scotland and the National Council for Voluntary Organisations’ (“NCVO”) Etherington report on fundraising practices in England and Wales in 2015. A key outcome from the Scottish Fundraising summit in November 2015 highlighted that a new system of regulation should be owned and led by the charitable sector – engaging charity trustees to take control of fundraising regulation within their organisations and across the sector.

Fundraising Working Group Consultation

Following these concerns, SCVO commissioned a review of fundraising self-regulation in Scotland through the establishment of the Fundraising Working Group in December 2015. The Fundraising Working Group (the “Working Group”) comprised of Scottish and UK-wide charities, and charity and fundraising professional bodies. Representatives from the Scottish Government and OSCR provided input as observers whilst a sub-group provided additional technical expertise.

The Working Group was tasked with three key objectives:

  • an options appraisal for the three main options for fundraising regulation in Scotland;
  • an engagement process for eliciting the views of the third sector, public and donors; and
  • a transparent and legitimate process for reaching the final decision

based on the vision that the consultation outcome would create a fundraising regulatory system which (a) commands confidence, (b) inspires public trust and (c) promotes good fundraising.

Three potential regulatory models were considered by the Working Group:

  1. a UK-wide Fundraising Regulator who acts as an intermediary between the public and charities;
  2. a new Scottish Fundraising Regulator who also acts as an intermediary between the public and charities; and
  3. no intermediary: charities and OSCR both have enhanced roles in regulating fundraising.

Following an extensive period of engagement through consultation, online survey and face to face meetings with the public and those in the sector at conferences and round table events, option three received the most support and was therefore recommended by the Working Group. Enhanced self-regulation is upon us – now what does that mean?

What is new?

  • A new Scottish Fundraising Complaints hub hosted by SCVO has been set up: the hub will direct the public to the appropriate place for their complaint and outline the new complaints process. There is also a dedicated phone line (08081 642 520), website (www.Fundraisingcomplaints.scot) and email address (scottishfundraisingcomplaints@scvo.org.uk) which will help members of the public to raise complaints.
  • If a member of the public is unhappy or dissatisfied with a Scottish charity, or would like to make a complaint the first port of call is still to go to the charity itself. Most large charities should have a two tiered complaint structure, meaning that the second stage would be to appeal to the charity trustees if the complaint is not resolved satisfactorily at the first stage.
  • If someone remains unhappy with the charity’s complaint procedure then it can now be referred to the new Independent Panel.
    • The new Independent Fundraising Panel has representatives from the public, fundraising professional bodies, charities, OSCR and the Scottish Government.
    • The Implementation Group – made up from people in the 12 person strong Scottish Fundraising Group – aims to have the Independent Panel ready by autumn 2016.
  • In the future, a model complaint handling procedure is going to be developed by the Panel, OSCR and other stakeholders. In addition, OSCR is going to aim to produce detailed guidance for charities on the fundraising requirements. Charity trustees will need to consider how such guidance is adopted for their own charity’s requirements.
  • Scotland based charities raising funds throughout the United Kingdom will be part of a self-regulation system involving charities and OSCR and so will not be subject to the United Kingdom Fundraising Regulator.
  • Charities fundraising in Scotland but who are not based in Scotland will be regulated by the United Kingdom Fundraising Regulator.
  • There will be a new fundraising guarantee – this is a public facing document which will describe the values, culture and practices expected of Scottish charities while they are fundraising. It will specify how the public could expect to be treated by fundraisers, along with a redesign of complaints and reporting processes to empower the public and trustees.

The Working Group report expresses the new process in this diagram:-

More powers For OSCR?

In a bid to further strengthen enhanced self-regulation the Working Group recommended that OSCR consider the need for more proportionate powers – which would be likely to require primary legislation. OSCR believes at this point in time that it can use its general enquiry powers on charity trustees’ duties and its remit to ‘encourage, facilitate and monitor compliance by charities’ under the 2005 Act’.

Click here to view image.

This enhanced system of self-regulation ties in well with OSCR’s Targeted Regulation regime which has been rolled out since 1 April 2016 (click here for our blog detailing more information). This new regime places emphasis on general good governance across all of a charity’s activities and would include effective and appropriate fundraising.

Some final words

When commenting on the outcome of the Working Group, Theresa Shearer (Chair of the Fundraising Working Group and ENABLE Scotland Chief Executive) said:

“Enhanced self-regulation has been identified as the best way to oversee fundraising in Scotland and support our vibrant sector to continue to thrive in a climate of public trust and transparency. We have learned through our consultation that charities and the public needed a much simpler approach, and now we have it. Charities will take the lead in designing a new, more rigorous, system of self-regulation that everyone can trust and understand. With OSCR having an enhanced role, there will be no room for doubt.”