Charities urged to review their subcontracting relationships

By Paul Winyard, Head of Policy at the Fundraising Regulator

Those that have worked in the charity sector as long as me will remember the poor practice and significant public concern that led to the Fundraising Regulator being established in 2016. Fundraisers committed to achieving best practice will likewise feel uneasy reading alarming stories in the media and learning of reports from concerned charities about serious issues relating to the use of subcontractors by fundraising agencies.  

There is mounting evidence that some companies - operating as sub-subcontractors - are using fundraisers who are insufficiently trained and motivated by commission-based payment structures. This has resulted in high-pressure sales tactics that may well breach the Code of Fundraising Practice and threaten to undermine public trust and confidence in the sector.  

All this serves as a stark reminder that charities must be eternally vigilant to avoid contravening the standards in the code. As the sector continues to rely on face-to-face fundraising as an essential source of funds, it must ensure third-party fundraising remains legal, open, honest, and respectful to avoid undermining the past eight years of hard work. 

What should charities be doing? 

With ultimate responsibility for their charity’s fundraising, trustees should ask their fundraising teams to review their face-to-face arrangements as a matter of urgency. 

Trustees and their charities must know precisely who is carrying out fundraising on their behalf and what those partners are doing to ensure compliance with the code. It’s important to remember that code breaches by fundraising partners and their subcontractors - and sub-subcontractors - may also be considered a code breach by the charity itself.  

Trustees and their charities must ensure that all fundraisers and agencies working on their behalf are fully trained on the relevant code standards - including the rules which apply to all fundraising - and that relationships are routinely monitored.  

What does the code say? 

Section 7.3 of the code provides guidelines on how to monitor relationships effectively, including: 

  • choosing a named person with lead responsibility for monitoring that the requirements of the law and the code are met 

  • developing clear reporting requirements with the other organisation and regularly reviewing their progress against agreed targets  

  • defining how monitoring will be carried out, including how often, based on an assessment of the risk posed by the fundraising activity  

  • approving and regularly reviewing training on the code, including frequently watching this training being delivered, and authorising content and materials for training  

  • regularly carrying out (and recording the results) of call monitoring, mystery shopping, site visits or shadowing with the other organisation’s fundraisers 

  • setting out a clear policy for handling complaints and feedback to act as an effective early warning system before poor practice becomes deep-rooted  

  • setting out a clear internal procedure for staff and volunteers to report any concerns about their organisation’s fundraising practices 

  • agreeing an action plan with the other organisation to deal with any concerns identified 

Charities must not use commission payments unless they have explored and exhausted all other options and there are measures in place to make sure excessive payments are not allowed. Nor should commission-based payment and self-employed contracts be used to replace proper payment and employment arrangements. Striking the right balance between reducing risk and encouraging fundraisers effectively is vital. 

Provisions for all of the above must be set out clearly in contracts, bearing in mind that effective monitoring and oversight becomes increasingly difficult with each level of subcontracting that is introduced. Ideally, you should avoid subcontracting arrangements altogether if you are not confident that they can be monitored effectively. 

We’ll continue to closely monitor the situation 

We will carry out investigations where we judge there is public interest to do so, and we will be producing further guidance for the sector on managing subcontracting relationships. We will also be considering whether the standards in the code need to be updated and possibly strengthened to ensure the public continues to be protected from potential harm. If you have questions about the standards required when planning and carrying out face-to-face fundraising, you can contact our Code Advice Service.  

We welcome the openness of those charities who have already spoken to us. We urge others to use our self-reporting pathway if they identify concerns in their own organisation or practices within their supply-chains. Sharing intelligence and learning helps us all respond to these challenges effectively. As a regulator we understand charities face increased demand for their services at the same time as there is pressure on income. But getting fundraising right is essential for maintaining public trust and protecting the long-term sustainability of the sector.