PACAC'S report entitled 'The 2015 charity fundraising controversy: lessons for trustees, the Charity Commission, and regulators' , published on 25 January 2016, has been described as 'damning' and blames charity trustees for the unacceptable practices adopted by the fundraising organisations employed on behalf of certain charities.
The report refers to the Charity Commission's guidance on fundraising and reiterates that trustees are legally responsible for ensuring that a charity's fundraising is carried out in accordance with trustees' legal duties.
PACAC concluded that 'last summer's controversies were evidence of a failure of governance by trustees'.
The Charity Commission has agreed with the Committee, emphasizing that the governance of charities depends solely on the trustees and that 'it is the trustees who are responsible for employing fundraising organisations that use extremely dubious methods'.
Does the Etherington review go far enough?
Following last year's fundraising controversies, the government asked the National Council for Voluntary Organisation's Chief Executive, Sir Stuart Etherington, to lead a review into the self-regulation of charity fundraising.
The government accepted the recommendations made by the review, but PACAC suggests that the recommendations do not go far enough. They focus on the regulatory and self-regulatory structures around fundraising, and less on improving governance by trustees.
PACAC argues that 'stronger regulation is no substitute for the required change of attitudes and behaviour from trustees.'
What about a Fundraising Preference Service?
The Etherington Review also suggested a new Fundraising Preference Service (FPS) to supplement the Telephone Preference Service (TPS), but PACAC confirms that they are not persuaded of the case for this.
PACAC agree with the Information Commissioner's view that the FPS would duplicate some of the functions of the existing TPS and confuse the public. They also argue that it would 'add limitations to the activity of charities that do not exist for any other sector'.
PACAC concluded that 'if a new preference service is to be introduced, the new fundraising regulator should urgently seek to discuss with the Information Commissioner how the new telephone preference service can work alongside TPS, without creating conflict and confusion in the minds of the public.'
A New Fundraising Regulator and the Role of the Charity Commission
Fundraising in the charity sector is currently regulated by the Institute of Fundraising, the Fundraising Standards Board and the Public Fundraising Regulatory Association. But since last year, this structure has come under scrutiny for being complex and lacking effectiveness.
The Etherington review recommended the introduction of a single regulator to replace the three existing regulators, a proposal which PACAC confirms was 'broadly welcomed by witnesses to their enquiry'.
The Charity Commission has accepted that it will adopt 'a backstop role', whereby it will not be at the forefront in terms of regulating fundraising, but will provide support and deal with non-compliance with the regulator's instructions as a failure of governance.
While the Etherington review proposed that PACAC should hold the new regulator to account for its performance, the report recommends that, with its expertise and resources, 'the Charity Commission is better placed to fulfil this function'. It, therefore, suggested that the Charity (Social Investment and Protection) Bill be amended to facilitate this.
What Trustees Should Do
As the report confirms, by failing in their responsibility to properly govern fundraising activities, 'trustees were either negligent, or wilfully blind to what was being done in their names.'
The report identifies measures trustees should take to avoid a repeat of last year's fundraising controversy, in particular:
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