How much is really for charity?

Charities have for many years used professional fundraisers and their own paid staff, perfectly validly, to help them raise money for good causes, as well as using volunteers.

However, it has been something of a grey area how much information a professional fundraiser has to give to potential donors as to how much they are getting paid and how much of the donation will go to the charity.

This uncertainty can lead to problems especially if people making a donation through a professional fundraiser are given the impression that 100% of the donation will go to the good cause, which may not be the case.

Regulations are expected to be brought into force by 1 April 2008 under the Charities Act 2006 which will clarify what information professional fundraisers need to give the public when they solicit donations.

They will in future have to state clearly for whom they are fund raising, how much they will get paid and how that is calculated, or if that is not possible, a best estimate.

Paid staff and other officers of charities who receive payment for acting as a collector will need to state that they are paid by the charity.

There is an exemption for low paid collectors, so if the collector is being paid no more than £5 a day or £500 per year by the relevant charity for making collections then there is no need to make the disclosure.

The new rules will also affect commercial businesses where they carry out a promotion which will benefit a charity. In future the business will have to state clearly which charity or charities will benefit, and how much (or a best estimate) of the proceeds the charity will receive. If the promotion is to benefit more than one charity, then the business needs also to state how the proceeds will be apportioned between each charity.

Charities, fundraisers and businesses working with charities will therefore need to know and apply the new rules as failure to comply is a criminal offence.

Alongside these changes the charity fundraising industry is also trying to drive up standards by encouraging charities who raise money from the public to sign up to the Fundraising Standards Board.

This requires charities to adhere to codes of best practice laid down by the Institute of Fundraising and to operate proper complaints procedures. Charities that have signed up to the scheme have to display the FSB ‘tick’ logo on their literature.

In time it is hoped that the public will vote with their feet and think twice before donating to a charity which is not part of the FSB scheme, but in my view the scheme needs greater publicity and more charities to sign up if it is going to work properly.

Certainly these measures should have the effect of increasing the public’s understanding of how charity fundraising works. Whether they will have the desired effect of improving the public’s confidence in giving to charity remains to be seen.

Published 21/11/2007. The author of this article is James Evans