Michele Todd: Strict regulation would benefit charity sector

This follows a Government-commissioned review in the wake of public and media concerns, particularly around vulnerable people, that recommended the creation of a new register to allow people to opt out of all contact from charities.

The review also called for the main fund-raising regulator, the Fundraising Standards Board (FRSB), to be scrapped – claiming that it “doesn’t have the clout or the sanctions” to prevent bad practice.

It is critical that the charity sector regains public trust and confidence following the relentless hounding of elderly and mentally fragile people for donations and bequests, coupled with requests for increased payments from existing donors.

Charities have a privileged status in society and rely on the generous goodwill of the British public. With this comes a responsibility to adhere to the very highest standards of transparency.

Most organisations in this sector strive to practice these values. For example, the RNLI recently announced that it would only target people for money if they formally agree to receive such approaches.

However, this was a voluntary move, with nobody obliged to follow suit. The major concern is that the sector has become largely self-regulating, which is why bad practice has crept in, often by accident rather than design. Having said that, we cannot overlook the fact that serious abuses have taken place.

Increasingly, charities with similar or overlapping objects are pursuing the same bank of donors. This has prompted long-established ones to up their game when competing – as with the Royal British Legion when Help for Heroes launched its very prominent marketing campaign.

Disputes between organisations and more intensive fundraising have led to a growing perception among donors – the very people they rely on for their income – that standards are falling.

Many find high street ‘chuggers’ (derived from the phrase ‘charity muggers’) annoying. Yet it is perfectly permissible by law and under charity codes for these highly tenacious freelancers – working on commission – to approach people in public places to try to extract regular payment agreements from them.

Clearly, these individuals are effective short-term revenue raisers or they would not still be with us. But if they are seen as irksome by benefactors, there will be a longer term reputational cost to both those who retain them – and to the wider sector.

Self-regulation requires fundamental reform, according to a recent report to the Public Administration and Constitutional Affairs Select Committee. With this in mind, what would benefit the sector is visible stricter regulation – ideally following a high profile public consultation to establish exactly which fundraising techniques are acceptable and which are not.

The organisation and subsequent inspection, administration and enforcement of any new rules demands a robust, adequately-funded, independent regulator. The big question is, who would take on responsibility for administering it?

Even if it is given greater powers, the Charity Commission, is too overextended to exercise them in its present form.

In recent years, successive governments have steadily underfunded, undermined, overruled and overstretched the Commission to the point where it struggles to fulfil its brief.

At the same time they have asked the third sector to provide additional services previously under the control of the public sector, with no real suggestion of how the further funding required can be achieved other than by suggesting loans at beneficial rates. This contradiction was always going to lead to less effective supervision at the very time it would be required.

Perhaps nowhere is this more clearly demonstrated than by the Kids Company affair. For 15 of the nearly 20 years since it was founded to support deprived children, it received public funds totalling £42m from Labour, coalition and Conservative governments to keep it afloat. Despite the Charity Commission being warned about poor management and misuse of funds, every time it applied for money, Ministers overruled the concerns of officials about its viability.

Other charities objected to this perceived favoured status while warnings about alleged financial mismanagement mounted. Nevertheless, the Charity Commission was unable to do what it is charged with – regulate.

The public must be allowed to give what it wants to whom it wants – safe in the knowledge that its hard-earned money is managed efficiently and honestly.

If the Charity Commission cannot be properly funded to step back up to the plate as an effective regulator a new body in that mould must be created to do the job properly.