Exploring the latest fundraising regulation

The regulation of fundraising is about to change, according to the Fundraising Regulator’s five-year strategy (2022-26). The document sets out its vision for how charity sector fundraising is to be regulated until 2027. Further details of what will happen over the coming year were then unveiled in the regulator’s business plan for 2022/23.

 

These plans aim to respond to changes in fundraising, in particular the growth of online activity, ensure public views are considered, and to assesses how regulation should be paid for.  

 

“We have seen considerable changes in the fundraising landscape since we were established and anticipate that methods will continue to shift and develop over the next five years too – shaped by wider social, economic and technological changes,” says Fundraising Regulator Chair Toby Harris. 

 

“This strategic plan reflects our ongoing commitment to evolve as an agile regulator alongside the sector – ensuring our regulation protects donors and the public, while also supporting a vibrant and creative fundraising sector.

 

“At the core of our plan are the principles of innovation, proactivity, intelligence, and collaboration.” 

 

Here we look at the key points raised and what changes charities should brace themselves for.

 

 

Greater focus on digital

 

Charities signing up to the regulator’s Code of Fundraising Practice provide a guarantee to the public they will adhere to high standards when asking for donations and amid their other fundraising activity.

 

This Code is regularly reviewed and the next update, to be carried out from this year through to 2024, will pay particular attention to the growth of digital in fundraising.

 

“We have already seen significant digital changes in fundraising with the rise of online platforms and charities reaching donors through social media and other channels,” states the regulator’s five-year strategy.

 

“We are now seeing increasing use of digital currencies, blockchain, machine learning and artificial intelligence; some charities are already starting to leverage these systems in their fundraising.

 

“Our next update of the code must provide a framework for fundraising within this digital context.”

 

 

Assessment of public expectations of fundraising

 

Collaborating with the public and wider fundraising sector is among priorities for the regulator over the next five years.

 

The regulator plans to “conduct detailed research into the public’s experiences with, and expectations of, charitable fundraising”.

 

It stresses the public will have a greater say in how fundraising is regulated.

 

Among pledges is to “create new information sharing opportunities” over the next five years “to ensure fundraisers and the public have a greater voice in developing our policies”.

 

This information gathering exercise will be through engagement events.

 

Issues flagged up by the public will then be presented to the charity sector to see where changes to regulation need to be made and “ensure our work is proportionate to the risks faced by the public and the sector”.

 

“Where new issues emerge or where we can see the benefits of a wider sector conversation, we will bring relevant bodies and organisations together to look at themes or topics in more detail and where appropriate share learning with the wider sector,” adds the regulator’s five-year plan.

 

 

Better collection of fundraising data

 

The Fundraising Regulator expects to see a “growing use of data to support fundraising”.

 

The growth in  data can improve transparency, says the regulator, and improve engagement between fundraisers and the public, to ensure they are being targeted in a way that best suits them.

 

“But with such huge opportunities there are risks,” it warns, including concerns around data security and consent.

 

Over the next five years the regulator aims to prioritise how fundraising can best be regulated to mitigate against such risks.

 

It aims to do this by better partnership working among charity sector umbrella organisations and other regulators “to harness the power of shared intelligence”.

 

“Collating data from numerous sources and from new technologies will be key to regulating in this environment,” states its five-year plan.

 

“We will use this intelligence to direct and inform our regulation and explore how data science can inform our regulation at a far greater scale than we are currently able to.”

 

 

Changes to the Fundraising Levy

 

The Fundraising Regulator is currently funded through an annual voluntary levy on large charities spending £100,000 or more a year on fundraising on a sliding scale depending on how much they spend. Around 94% of its funding comes from the levy.

 

It also receives money from registration fees, from commercial fundraising firms and charities spending less than £100,000 a year on their fundraising.

 

From 2023 it will carry out a two-year review of the levy “to ensure it remains the most effective way to fund our regulation”.

 

It has indicated that an increase to levy fees “will be necessary”. Since 2016 the only changes made to the levy has been to add extra bands to make the levy more progressive and fairer for smaller charities. 

 

The amount the fee will be increased by depends on the number of charities within the £100,000 threshold, as well as “external factors”, such as inflation.

 

The regulator anticipates that its supplier, project investment and staffing costs will increase by 5% over the next five years.