New regulations for professional fundraisers and commercial participators

29/10/2008

New regulations came into force on 1 April 2008 for professional fundraisers and commercial participators (i.e. someone not in the business of fundraising, but who, in the course of conducting his normal business activity engages in a promotion with a charity to raise money for it).

Introduced as part of the Charities Act 2006, the new laws seek to enable donors to make informed decisions, knowing how much of their donation will reach the fundraising organisation and the proportion that will be received by the professional fundraiser or commercial participator.

Professional fundraisers will need to make a disclosure to potential donors about the level of their and/or their firm’s remuneration. For example:

1. Where the professional fundraiser (an individual) is paid a fixed rate for each donor recruited and funds are being raised for a single institution: “I am a professional fund-raiser working for the benefit of <>. It has been agreed that I will be paid <<£xx>> for every donor that I recruit during the course of this campaign. It is estimated that I will be paid <<£zzz>> for my work on this campaign.”

2. Where the professional fundraiser (an individual) is being paid an hourly rate and funds are being raised for a single institution: I am a paid / professional fund-raiser working on behalf of <>. I am being paid an hourly rate of <<£xxx>>. In all, I expect to be paid approximately <<£ XXX>> for carrying out this programme of conversations with supporters like yourself throughout the UK across the whole of the year.

3. Where the professional fundraiser’s (a fundraising business) fees are fixed in advance and funds are being raised for a single institution: I work for <> and we are working for the benefit of <>. My organisation is being paid <<£XXX>> to recruit supporters like yourself to make regular donations to <>. This fee was determined in the following way <>.

There are also new disclosure requirements for individuals directly employed by a charity as fundraisers, or trustees that are paid to collect donations. Examples of the statements that must be made when soliciting funds for a particular organization are provided below:

1. I am making this appeal for the benefit of <>. I am a paid employee of that charity.

2. I am making this appeal for the benefit of <> and <>. I am a trustee of <> and I am being paid by that charity to act as a collector. The proceeds from this appeal will be <>.

3. I am making this appeal for the benefit of <>. I am a paid employee of <> which is connected to that charity.

The purpose of these new regulations is to build public trust and confidence in the fundraising profession by providing greater transparency to donors about how their donations will be used. They will now be offered explicit information about how all paid fundraisers are remunerated.