Calls for changes to street appeals by unregistered fundraisers

What are unlicensed fundraisers and how do they differ from Code fundraisers?

Street collections are principally governed by the Police, Factories, etc. (Miscellaneous Provisions) Act 1916 ("the Street Collections Act"), and house-to-house collections by the House to House Collections Act 1939 ("the House Collections Act") and 1947 Regulations. Under these Acts, licenses are required to conduct cash collections in public places.

A licence is not typically required where the public is asked to sign up to regular donations via direct debit, as no money is exchanging hands at that time. However, if the first donation was made at the time of sign up, this would be considered a 'collection' and a licence would be required. Licenses, if required, are typically granted by local authorities.

In London, the Metropolitan Police or City of London Police act as the licensing authority. This means that different licensing requirements may apply pursuant to byelaws, to govern times, locations, numbers of collections and ID requirements. Fundraisers should ensure that the licensing requirements for their fundraising activity or collection are confirmed before commencement.

This is separate to the standards of conduct expected by those fundraisers covered - voluntarily or mandatorily - by the Code, and charities which are required to comply with the Code. VWV has previously written on the new Code here.

What is needed to conduct street collections and house-to-house collections?

The Street Collections Act does not specify what the requirements for street collections are. As such, establishing the requirements for a licence or permit are the responsibility of each relevant licensing authority. Typically, the requirements will cover the need to:

• Obtain a street collection permit for the specific date(s) and location(s); and
• Comply with conditions of the permit, relating to:
  a. Times, places and number of collectors;
  b. Use of ID badges;
  c. Minimum ages of collectors (often over 16);
  d. Documenting and monitoring counting and banking procedures, including that returns must be submitted to the authority;
  e. Sealing collection boxes or buckets, uniquely numbered and opened only by authorised persons; and
  f. Conduct of individuals, including no undue obstruction, undue pressure or nuisance.

A person who breaches the Street Collections Act is liable to a fine not exceeding level 1 on the standard scale.

For the House Collections Act, the requirements are much more prescriptive. The promoter of a charitable collection as well as the collector can be found guilty of an offence if they conduct a house-to-house collection without a licence. By way of interpretation under the Act, 'charitable' does not necessarily carry the same meaning as under charity law or other fundraising legislation, and 'house' includes a place of business. Some charities may also hold specific exemptions from the requirements regarding house-to-house collections, so it is important to understand what permissions or exemptions are relied upon before commencing a collection.

Licences may only be granted for a maximum of 12 months, unless the licensing authority considers it expedient to grant a longer licence for a period of 18 months. Licences may be refused, and such decisions can be appealed, where it appears to the licensing authority:

1. The cost of the collection is disproportionate to the anticipated value of the proceeds;
2. The remuneration of any collector is excessive compared to the anticipated value of the proceeds;
3. The applicant is not fit and proper, or has failed to ensure that collectors are fit and proper. 

The conditions of any permit under the House Collections Act and Regulations mirror those under the Street Collections Act and associated licensing authority requirements. Breaches of different requirements of the Act carry different penalties, however the maximum penalty is six months' imprisonment or a fine not exceeding level 3 on the standard scale (or both).

What reforms are being called for?

Given the caps on penalties for breaches of these Acts, the Fundraising Regulator, Charity Commission, Chartered Institute of Fundraising, British Transport Police, Institute of Licensing, the Local Government Association and Metropolitan Police have called for reform to street and house-to-house fundraising. This was sparked by recent prosecutions for unlicensed street collections, where it was understood that the penalised organisations - both community interest companies, and not registered charities - continued to operate unlicensed after receiving fines. These groups argue that unlicensed collections undermine confidence in the third sector and put the generosity of people in public settings at risk, which harms compliant charities and fundraisers. Due to the required enforcement processes, licensing authorities are also unnecessarily burdened when seeking to exercise their powers.

It is reported that the reforms by the regulators and other interested parties listed above include:

• Increasing the maximum fines to an unlimited level 5 fine, which includes the option of a custodial sentence;
• Introducing fixed penalty notices to allow swift enforcement action, so that licensing authorities need not rely on lengthy investigations and court proceedings; and
• Extending the Street Collections Act to cover offences by company directors, to prevent phoenixing behaviour.

Best practice fundraising

Where charities are looking to conduct street collections or house-to-house collections, they must ensure they hold the relevant licenses. These should be applied for well in advance of the proposed collection date(s). Individual collectors should be provided with training to meet the Fundraising Regulator’s Code. In short, this requires: respectful approaches, clear disclosure, no undue pressure, and sensitive handling of people in vulnerable circumstances. When using a professional fundraiser or commercial participator, charities should also ensure they have provided the required solicitation statements. You can read our recent article about commercial fundraisers here.

Charities should also maintain public liability insurance and liaise with councils and local stakeholders to avoid obstructions and comply with byelaws (if not already a condition of their licence), and consider accessibility requirements. If the charity collects personal data (e.g. for follow up), collectors should be provided with training in data protection and donors should be given GDPR compliant privacy information.

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For further guidance on compliant fundraising and collections in England and Wales, feel free to contact the Charity Law and Governance team at VWV. We are here to help you navigate the complexities of charity law with confidence.