On 1st April, the law about what statements must be made as part of charity fundraising changes. The Cabinet Office has provided draft guidance on the New Statements. The Consultation closes on 31st May 2008. Please find here the link to the Consultation - Consultation Link
Main changes
There are four main changes:
1. Professional fundraisers will have to state the actual amount (or a reasonable estimate) of what they will be paid.
2. Similarly, commercial participators will have to state the actual amount (or a reasonable estimate) of what they will pass to the charity.
3. There is a new requirement for statements to be made by a paid charity employee, paid charity trustee or paid officer of a charity or charity trading subsidiary if they are collecting as part of a street or house to house collection.
4. There is a new requirement for statements to be made by a person paid to carry out a street or house to house collection who falls outside the definition of professional fundraiser.
Even though these changes come into force quite soon, the Cabinet Office has only just published draft guidance about the new requirements. Final guidance is not expected until the summer (the consultation ends on 31st May).
Implications for professional fundraisers and commercial participators
Example statements in the draft guidance make clear the Cabinet Office is interpreting the legislation widely to require professional fundraisers and commercial participators to state a total amount for the particular fundraising campaign. This places a more onerous burden on charities and other corporate/fundraising partners and, in cases where it is difficult to estimate the total amount, the new requirements will be very difficult to comply with.
Implications for charities and their trading subsidiaries
The Government is strongly recommending that as a matter of good practice charities and charity trading subsidiaries (although exempt from these legal requirements) should as a matter of good practice comply with the draft guidance. Again, how that will work out in practice is unclear.
Response to the consultation
BWB is running an Information and Consultation Session on 3rd April at 5.30pm. The speakers will include Megan Pacey (Director of Policy and Campaigns, Institute of Fundraising) Stephen Lloyd (Senior Partner and Head of Charity & Social Enterprise, BWB), and Rosamund McCarthy (Partner, BWB). We will also be examining the guidance on behalf of clients and responding to the consultation. We would urge all our clients involved with fundraising to look at the draft guidance and either feed their comments to us or respond individually to the consultation. Particular points to consider include:
* Is it a good idea for charity trading subsidiaries (exempt by law from these requirements) to comply as a matter of good practice?
The Government, together with the Charity Commission “strongly recommends” that charities and their trading subsidiaries should put in place agreements and, more onerously, make fundraising statements. So, for example, if a charity sells Christmas cards via its trading subsidiary, the Christmas cards and packaging would have to include a statement explaining the amount overall the charity is likely to receive from the sale of Christmas cards.
* Fundraising statements by persons paid to carry out a public charitable collection.
Is the scope of this new requirement sufficiently clear? In particular, does it replace or sit alongside the requirement of professional fundraisers?
* Would it be helpful to have examples of how statements should be worded if some or all of the money from a corporate promotional venture is routed through the charity’s trading subsidiary? None of the examples in the draft guidance address this.
Wording of fundraising statements from 1st April
If you need advice about the wording of statements for fundraising campaigns from 1st April onwards, please speak to your usual BWB contact.
Information and Consultation Session on New Statements – 3 April 2008 at 5.30pm
Please book online at Consultation Session on New Statements, or email Mona Rahman at seminars@bwbllp.com quoting reference “Consultation Session on New Statements” if you would like to come to the seminar.
The speakers include:
- Megan Pacey, Director of Policy and Campaigns, Institute of Fundraising
- Stephen Lloyd, Senior Partner and Head of Charity & Social Enterprise, Bates Wells & Braithwaite London LLP
- Rosamund McCarthy, Partner, Bates Wells & Braithwaite London LLP
