Sarah Atkinson speech at Institute of Fundraising convention

Fundraising is vital and it’s always important to focus on good practice.

Sarah Atkinson

Getting your trustees on board with fundraising

Unless you’ve been under a rock over the last year, you will have noticed fundraising has been having a big moment.

As the regulator, the Charity Commission aims to increase public trust in charities so we were concerned about the fundraising crisis and the way has damaged public trust. Last week we published our two-yearly public trust and confidence in charities research. Our index where 10 is full confidence and zero none, is down from 6.7 to 5.7.

Our research found that a key factor was growing disquiet about aggressive fundraising – though there were also concerns about whether charities were keeping down the costs of administration including the salaries of senior staff and about whether the intentions of charities were resulting in the positive impact which the supporters of charities want to see. We are already working on solutions to these issues with charities in the sector.

Over the past year we have worked closely with charities, government and the others bodies responsible for strengthening fundraising practices and reforming the self-regulatory scheme.

Currently we are working with the new fundraising regulator, and we have seconded a senior member of staff to work with them.

A few weeks ago we published a new CC20, our fundraising guidance after our consultation which closed in February. In fact, we were planning to do this before fundraising hit the headlines. Fundraising is vital and it’s always important to focus on good practice. We think that we can use this guidance to raise standards. It’s about making the good practices better.

The great thing about the consultation is it has confirmed that people really do use our fundraising guidance – it’s one of our most-read publications.

So what does the guidance do?

Our revised fundraising guidance concentrates on the trustee role and on promoting trustee compliance with their legal obligations in the fundraising context. We are focusing on what we regulate.

What’s new about it?

  • the guidance sets out 6 principles for fundraising. There was very strong support for those principles from those who responded to our consultation. So the new version of the guidance will keep that approach
  • it’s also shorter and more succinct
  • and it contains some useful new tools like a 2-page checklist at the end so you can make sure the charity is doing what it needs to and you have covered all the bases

The new guidance is clear that trustees have, and must take responsibility for, their charity’s fundraising. They must comply with their legal trustee duties when overseeing it.

So what are the principles?

1. Plan effectively

This says that the trustees are responsible for agreeing their charity’s fundraising strategy. Others might be responsible for drawing up the strategic options, but the trustees must have final ownership. The strategy should reflect the charity’s values and the trustees must be satisfied that it will be implemented.

2. Supervise your fundraisers

This is about trustees having oversight of the fundraising which staff or others, carry out for their charity.

Some of the feedback we have received in the consultation expresses a concern that the new guidance imposes an expectation that trustees have a more “hands-on” role than is feasible in large charities of any size and undesirable for their good governance.

Our expectation isn’t that trustees should get over-involved in the day to day management of their fundraising. We recognise that many charities, like other organisations, rely on effective delegation.

But trustees must have systems in place for strong management of the people and organisations that the charity works with so that they can be satisfied that its fundraising is managed in its best interests. They are accountable if something goes wrong.

Following the comments we’ve had on delegation, we are working to make our expectations about delegation really clear for the published version.

3. Protecting your charity’s reputation, money and other assets

This is about getting all the money in and having controls which reduce the risk of fraud. But it’s also about reducing reputational risk by considering the impact of the charity’s fundraising on its donors, supporters and the public.

4. Finding out about, and fully complying with, any laws or regulations that apply to your charity’s fundraising

The legal rules that apply to various types of fundraising can be detailed and complex. They cover compliance in important areas such as with data protection law, licensing, and working with commercial partners. These rules must be followed.

With the new version of our guidance we’ve moved away from providing a handbook approach which tries to cover the whole of the legal framework for fundraising, so that we can focus on compliance with trustee duties which we regulate.

We know from our consultation that for some charities and others this is an unpopular change, but we have to stick to our regulatory focus and to what our resources allow.

Our guidance will cover the charities acts’ rules and regulations on fundraising, including the new act, and we will make sure that there are the best possible links to sources of other information about the wider framework.

5. Finding out about, and following, any recognised standards that apply to your charity’s fundraising

These standards are in the Code of Fundraising Practice. The commission expects all fundraising charities to fully comply with the code.

6. Being open and accountable

This includes complying with any relevant statutory accounting and reporting requirements on fundraising and using reporting to demonstrate that the charity is well run and effective. In a charity’s fundraising communications it is about being able to effectively explain your fundraising work to members of the public and the charity’s supporters.

And if I were to have a top line for you to take away today, it would be that you all need to get across these 6 principles. You can find them in the guidance on our website– look for CC20.

Whether you are trustees, or not, you should also sign up on gov.uk for updates from us.

Additionally, thank you to everyone who took part in our consultation.

We had some really useful responses and we have factored many of those in.

Above all, we have found it useful to understand who uses our fundraising guidance, whether it’s clear to people and how much it’s used. In fact it’s one of our most used pieces of guidance.

Promoting compliance by trustees with their legal obligations and trustee duties is key to our regulatory focus, so we have brought this work forward.

We believe trustees are central to fundraising. They set the strategy after all.

This is not just a piece of paper. Trustees need to understand your fundraising appeal or plan and spend time on it. It cannot be too complicated for them to understand it (if it is you either need a new plan or new trustees).

And of course we’ve had some pretty interesting, pretty different responses to our consultation from small or larger charities and from charity lawyers and umbrella bodies, which reflects what a diverse sector the Charity sector is.

For just over half of the charities that responded, the input into the response included trustees. Our messages in this guidance are principally for trustees so we were pleased to have that engagement. Again, trustee engagement with the consultation was much higher for the largest charities where 85% had had input into the consultation response.

We were pleased that 2/3 of those that responded to our consultation found the revised version more helpful than what we currently have. Of the very large fundraising charities who responded, 80% favoured the new version.

There were some concerns about the tone of the guidance. The style and tone of our guidance has undoubtedly changed over the last two or three years, as you would expect in line with the changes to our regulatory approach. The revision to cc20 reflects this, in its sharper focus on our regulatory expectations.

We won’t be changing that approach, but we do want to make clear that our intention is to help trustees to understand what they need to know and do, not to scare them!

There was lots of support for including a checklist, with some refinements, and people are keen to have more examples of how fundraising should work in practice.

So what are trustees’ legal duties and responsibilities under charity law?

  • acting with reasonable care and skill
  • always in their charity’s best interests, and
  • managing its resources responsibly so that its reputation and other assets are protected from inappropriate risk.

One of the best ways for trustees to make sure that they are complying with their legal duties is to put in place good governance. This is about

  • setting and monitoring the charity’s strategic aims and direction
  • ensuring that there is strong management of its money, reputation and other assets
  • having effective systems, safeguards and controls in place

But it’s also about trustee boards being committed to continual improvement of their own performance: having the right structure and enough time for effective discussion and decision making; the right mix of skills and expertise - making regular opportunities for re-assessing that mix; making sure that the board has access to the right information and advice in the best format; and being prepared to ask those probing, challenging, sometimes even awkward questions.

Published 6 July 2016