Fundraising best practice
A common concern about the charity sector is that too little of the funds raised get spent on performing charitable activities. This issue was recently considered by CCEW when carrying out an inquiry into Hospice Aid UK which had a costly direct mailing agreement with a third-party agency, and discovered that substantial funds being generated were being almost entirely consumed by the direct costs and fees of running the activity, leaving only 6% of the sums raised available for spending on the charitable activity.
This case attracted the attention of the Fundraising Regulator, and in response has published five best practice considerations when working with external agencies.
- Act in your charity’s best interests, taking reasonable steps to assess and manage any risks involved, including potential reputational risks.
- Understand the standards that apply as set out in the Fundraising Code and check whether the third party has registered with the regulator.
- Make sure third parties are monitored effectively to ensure that they are operating in line with the Fundraising Code.
- Consider the donor perspective and ensure that they can make informed decisions when giving to charity.
- Engage with the Fundraising Regulator for help and support.
Whilst the Fundraising Regulator does appreciate that a third-party needs to cover the costs and will seek to generate a reasonable profit, they do expect that the greater portion of money raised will be transferred to the charity. Trustees should ensure that this is indeed the case with any arrangements they enter into with external fundraising agencies so that they don’t attract the attention of the regulators.