We recently wrote an article on the Scottish Government’s consultation on proposed changes to the rules on ‘public benevolent collections'.

Equally important to charities are fundraising activities which do not fall within the category of public collections, from engaging with a professional fundraiser to raise funds on the charity’s behalf, to organising an event in which individuals can participate and raise donations from friends and family. We wrote an article on the legal position regarding ‘professional fundraisers’ last year, but a case reported this month in Third Sector has prompted us to consider the position of charities who rely on individual fundraisers to raise money on a charity’s behalf, and the legal position regarding such relationships.

The basics

In the UK, certain fundraising activities are subject to specific regulation, but largely speaking, charitable fundraising is self-regulated. The theory behind self-regulation is that it allows charities themselves to set their own standards and to develop codes of practice, which allows them to demonstrate good practice, with a view to increasing public trust and confidence.

There are two key parts to self-regulation. Firstly, the Institute of Fundraising has developed a number of codes which set out best practice standards. There are currently 28 different Codes, which cover fundraising activities from sending chain letters, to organising challenge events in the UK and abroad. Each Code identifies:-

  • a requirement that is mandatory at law (a ‘must’);
  • a requirement that is mandatory for members (an ‘ought’); and
  • a course of action which is recommended as best practice (a ‘should’).

Each Code undergoes legal review north and south of the border, and any differences between the jurisdictions are highlighted.

Secondly, the Fundraising Standards Board (“FRSB”) deals with complaints about breaches of the Codes. Organisations which are involved in fundraising are encouraged to become members of the FRSB and, on admission, an organisation is required to adhere to the Codes and commit to a ‘Fundraising Promise’.

OSCR is not involved in regulating fundraising in itself, unless the activity raises more general questions about whether there has been misconduct in the administration of a charity, or whether the trustees have exercised the necessary care and diligence in their control and management of the charity – we saw this when OSCR became involved in the review of the Sick Kids’ New Pyjamas Campaign.

What is the case we are talking about?

The case in question revolves around an individual who signed up to climb Kilimanjaro in aid of a charity. On signing up, he paid a deposit of £220. The terms and conditions were clear that participants had to raise a minimum of £2,440, and that the deposit was non-refundable.

The individual later withdrew from the trek, apparently because he had not raised the minimum target. He asked for his deposit back. The charity refused, but did offer to defer his place to the following year, which he declined. The dispute was eventually referred to the FRSB. It considered the case, and held that the charity had been ‘fair and reasonable’ in its dealings with the individual, had complied with the Codes and all the guidance, and was not therefore obliged to repay the deposit.

What are the implications for you as a charity?

Here are some tips to help you in your fundraising activities:-

  • if your charity is a member of FRSB, make sure your fundraising contracts and arrangements comply with the relevant Code or Codes;
  • if your charity is not a member of FRSB:-
  • you should still make sure your fundraising contracts and arrangements comply with the relevant Code or Codes – the FRSB will consider any complaint (even about non-member organisations) in light of the Codes;
  • consider whether it would be worthwhile to join – membership can serve to show that your organisation is committed to high standards of fundraising practice;
  • in any event, always make sure that your arrangements are clear and fair, and that those that sign up to terms and conditions are given an opportunity to read and understand them;
  • if you get involved in a dispute about fundraising, and even if you consider that your charity is firmly in the right, consider the possible PR implications if a complaint is made to the FRSB – it may make practical sense to agree a compromise!

Resources

The full Third Sector article can be accessed here

www.thirdsector.co.uk/news/Article/1097848/Childreach-International-not-breach-fundraising-guidance-refusal-refund-deposit-regulator-rules/

For our previous article on professional fundraisers go to

www.morton-fraser.com/publications/articles/732_charities_fundraising_regulations_and_guidance

For more information on the Institute of Fundraising Codes, go to

www.institute-of-fundraising.org.uk/Codes_and_regulation/Codes/codes-directory