By Lord Toby Harris, Chair of the Fundraising Regulator
Since the Fundraising Regulator was established in 2016, we have not changed what we ask charities to pay through the levy and registration fee. We are now eight years on and last year the Board agreed that the levy would need to be increased for us to continue functioning at the level currently needed, to make sure our regulation is fit for 2030 and beyond. In December 2023 we consulted the sector to seek responses to our proposed changes.
The proposal on which responses were sought
Charities spending £100,000 a year and more on fundraising are included in the levy. Our proposal was an increase in levy payments for everyone, but with the percentage increase being higher the more a charity spends on fundraising. Conversely, the less you spend on fundraising, the lower it would be. We also proposed the addition of two new bands within the levy and an increase to the registration fee.
Our proposal sought to make the levy fairer for smaller organisations, who currently pay a larger proportion of their fundraising spend on the levy. The proposals were:
- Increases for the 53 charities spending the most on fundraising to be 50%.
- Increases for the next 339 fundraising charities to be 30%.
- Increases for the majority of charities (over 1600) covered by the levy of 20%.
- Small charity registration annual charge to rise from £50 to £60.
Response to the December 2023 proposal
We received 222 responses to the proposal from across the sector and are grateful for the time taken to reply to us. The findings of the review, which you can read in more detail here, found that:
- 51% of the respondents supported our proposals.
- However, 70% of levy payer respondents (representing 3.6% of all current levy payers) were opposed to the plans).
Many respondents who were against the proposals shared a common concern about the size of the increase because of the increased financial pressures that charities are currently under. We recognise the impact the current economic climate is having on charities and taking these concerns into consideration the Board has agreed that whilst the levy will have to go up for the first time in eight years, the proposed increases will be phased in over two years (in September 2024 and September 2025).From September 2026 the levy will increase in line with the Consumer Price Index, as set out in the original proposal. However, as the Board has always done, it will reflect on these increases annually when considering our budget.
You can find full details of the changes here.
Value for Money
We recognise that value for money is a concern, and it’s appropriate that we address how the landscape has changed since 2016 and the ways that we have grown and adapted to meet this.
We are here to support charities at a time of rapid change, and last year we introduced our proactive regulation function to aid this. The first project undertaken was the Market Inquiry into the use of subcontracting in face-to-face fundraising. We launched this in response to increasing complaints and self-reports in this area and concerns that were being shared with us directly and in the media. Our ability to deliver a focused and swift response to this emerging issue meant that we could support charities to navigate this complex area, helping them to avoid issues before they arise. We have also been able to assure the public that these practices are not more widespread. You can find out more about this here.
Another emerging issue that we are responding to is that of new entrants into the public fundraising sphere. In particular, we are addressing poor fundraising by some Community Interest Companies (CIC’s). These non-charitable bodies can appear to be charities to the public as they approach people for donations on the street in a similar way to face-to-face fundraising by charities. We therefore need to be involved as poor practice by these bodies can damage the reputation of charitable fundraising. We have investigated several cases, and we are working closely with the CIC Regulator, local authorities, the Police, and other relevant bodies to tackle this issue. Our aim in doing this is to mitigate the potential loss of public confidence in legitimate and compliant fundraising and the possible reputational damage to the charities carrying it out.
Our complaints caseload increased by 8% last year, including 20 self-reports by charities in the past 12 months. Many of our cases are increasingly complex and some see us leading or being part of investigations involving several regulators and other agencies. Last year we increased the size of the Casework team to ensure we maintain our relationships with the charities we engage with as well as members of the public contacting us with concerns.
Our research shows that the public values effective regulation. We know that the public have high levels of trust associated with the Fundraising Regulator and the Fundraising Badge. In fact, 73% would be more confident in supporting a charity displaying the badge.
As the sector evolves so must we, so that we can continue to support charities to deliver their vital work. And we must continue to engage with the public whose generosity enables charities to make a difference. Simply put, it is principally the levy that enables us to do this and to continue doing it effectively and proactively in the shared interests of charities and the generous public so that there is a continuing positive environment for fundraising to prosper.