Four years on from the Charities Act 2016, is it time for charities to brush up on the rules around digital fundraising?
It’s been four years since the independent body Fundraising Regulator was established to restore public confidence in the sector, following a decade marred by scandals in charity fundraising - as well as four years since the introduction of the package of reforms to fundraising law under the Charities Act 2016.
As part of the act, it’s become the law for charities to include a detailed statement on their fundraising activities in their annual report - rules that affect all charities with an income of over £1m fundraising from the public.
However, it seems that charities are still getting to grips with reviewing their fundraising practices and demonstrating that they are up to scratch under the law - a recent report from the Fundraising Regulator revealed almost two thirds of charities are still failing to comply with the new fundraising reporting rules.
The research found that as many as 60% of charities that spend more than £100k a year on fundraising are failing to explain their practices properly in their reports.
Under the onus of a tougher regulator and stricter enforcement, charity fundraising teams have faced a challenging time understanding exactly what’s required of them, particularly as they navigate the brave new world of digital and the need to balance the convenience of digital fundraising platforms with ethics and law.
Since 2016’s fundraising law overhaul, the regulators have been taking steps to crack down on potentially intrusive, aggressive or unethical fundraising practises, ensure the protection of supporter data and keep ethical tabs on the way third parties fundraise online. This includes taking ownership of the Code of Fundraising Practice that sets out the responsibilities of fundraisers.
While the code itself is not law, many of its precepts reflect the law, and where they don’t indicate a statutory requirement they represent best practice for all charities fundraising from the public, whether or not they’re registered with the Fundraising Regulator.
As the Fundraising Regulator makes clear: “If you are not registered with Fundraising Regulator and adhere to the Code, you need to set out any equivalent approach and how it meets the standards required in law and reflects best practice.”
But according to the Fundraising Regulator, many of those three in five charities that fall short of reporting rules are doing so because they’re failing to demonstrate how the Code of Fundraising Practice is used to guide their work.
In the days following the tragedy of the Grenfell tower fire in 2017 in which 71 people lost their lives, there was an outpouring of generosity from the public. Many people took to online fundraising platforms to set up fundraisers for around 20 different charities including the British Red Cross and Kensington and Chelsea Foundation.
It’s easy to see the convenience of platforms like JustGiving in the wake of a sudden disaster like Grenfell or the Manchester bombings – anyone can set a page up in minutes. But when Neil Coyle, Labour MP for Bermondsey and Old Southwark, discovered that JustGiving had a policy of keeping 5% from all donations, it sparked accusations of exploitation and demands that the company return £500,000 they “picked from the pockets of victims of terror and tragedy.”
The Code of Fundraising Practice sets out rules regarding digital fundraising based around the principles of visibility, transparency and consent, to prevent scandals exactly like this from upsetting the delicate balance of public trust in charities.
One of these rules states that if a third party charges fees (including payment transaction fees) on a donation-by-donation basis, charitable institutions should make sure the fees, and how they are charged, are clear to fundraisers. The section of the code outlines the details that must be clearly visible, like how much your charity will receive and how pay gets calculated.
The Code of Fundraising practice makes it clear that it’s the responsibility of charities and their trustees to be aware of exactly how their fundraising campaigns are run and managed by third parties online – so they can know when and how it might be appropriate to use digital platforms, the questions they should be asking of any fundraising partners they use, and ultimately how better manage the risk to their reputation.
Not only is the Code of Fundraising Practice a recommended component of charity’s fundraising reporting under the law, but it also offers a fundamental guidance framework for charities operating in the brave new world of digital.
The Code’s section on digital includes the basic legislative requirements that all charities should be following, like GDPR around the collection and use of personal data, website cookie law and mobile fundraising laws such as those under the Phone-Paid Services Authority.
But it also provides best practice on how charities should meet accessibility standards online and keep user needs at the heart of what they do. This is essential for ensuring that your charity’s fundraising campaigns make the biggest impact they can and that the information you give out is inclusive for everyone.
Whatever approach a charity decides to take to their mandatory reporting, they can’t ignore the impact that digital has on the way they fundraise or pretend to be ignorant of their responsibilities.
While complying with the code is still a voluntary part of charities’ fundraising reporting, participation shows that charity trustees are taking their responsibilities seriously to protect donors and the public, including vulnerable people, from the many risks they face in the online world - and ensure that charities can keep on making the best of the opportunities.