Charities Act 2016: new fundraising rules
Regulatory alert issued on new Charities Act fundraising rules, coming into force on 1 November 2016.
New rules for charity fundraising start on 1 November 2016. They affect the trustees’ annual reports of larger charities that fundraise from the public, as well as the contents of the agreements that must be in place when professional fundraisers or other businesses (‘commercial participators’) raise money for charities.
The Charity Commission (‘the Commission’), the independent regulator of charities in England and Wales, is issuing this alert to inform fundraisers and the trustees of charities affected by the new provisions about what they have to do to comply.
In the next few weeks this alert will be sent directly to 5,500 affected charities on the Commission’s register. We are also working with other sector bodies so that relevant information about compliance with the new rules reaches affected fundraisers and unregistered charities.
The changes are introduced by the fundraising sections of the Charities (Protection and Social Investment) Act 2016. They will help charities to demonstrate their commitment to protecting donors and the public, including vulnerable people, from poor fundraising practices. The new law will also help to ensure that fundraising standards form part of the agreements between charities and any commercial participators or professional fundraisers with whom they work.
There are 2 new requirements.
- The first requirement applies where a charity, registered or unregistered, uses a professional fundraiser or commercial participator to raise funds. Broadly, it says that the compulsory written agreements between charities and these third parties must include extra information covering:
- the scheme for regulating fundraising or recognised fundraising standards that will apply to the professional fundraiser or commercial participator in carrying out the agreement
- how the professional fundraiser or commercial participator will protect the public, including vulnerable people, from unreasonably intrusive or persistent fundraising approaches and undue pressure to donate
- how charities will monitor the professional fundraiser or commercial participator’s compliance with these requirements
- The second requirement applies to registered charities that, by law, must have their accounts audited. It says that these charities have to include extra information about fundraising in their trustees’ annual report. Broadly, the extra annual statements are about the charity’s:
- approach to fundraising
- work with, and oversight of, any commercial participators/professional fundraisers
- fundraising conforming to recognised standards
- monitoring of fundraising carried out on its behalf
- fundraising complaints
- protection of the public, including vulnerable people, from unreasonably intrusive or persistent fundraising approaches, and undue pressure to donate
Your charity may be affected by either or both of the new requirements.
You can find out how your charity is affected by the new provisions, and when compliance with them is required, by reading these FAQs, developed jointly by the Charity Commission and the Fundraising Regulator.
You can also look at Charity fundraising: a guide to trustee duties (CC20)and Charity reporting and accounting the essentials November 2016 (CC15d) which have been updated to reflect the new requirements.
Sarah Atkinson, Director of Policy and Communications at the Charity Commission said:
The new law is part of a package of fundraising reforms introduced last year to strengthen fundraising practice and regulation. We know that many in the sector are working hard to support these changes, and to review their own fundraising practices so that public trust can be restored. The new Charities Act provisions will help charities to demonstrate that their donors and the public are treated with respect and protected from intrusive practices, and that recognised fundraising standards are always part of the picture where charities are working with a professional or commercial partner.