By Alex Edmondson, Registration Service Manager, Fundraising Regulator
At a time when many people are heading off on their summer holidays, the Fundraising Regulator is preparing for one of the busiest times of its year, as we begin to collect the Fundraising Levy 2021/22 from September onwards.
If your organisation is eligible to pay, you will soon receive an invoice. This year, some organisations will be asked to contribute more or less compared to last year, as the amount they spend on fundraising has changed. A considerable majority will be asked to contribute the same or lower fee. I will explain more below about how and why we’ve calculated this, and how paying the levy enables charities to demonstrate commitment to good practice.
What is the levy?
First, the basics: the levy is the voluntary contribution made by charitable organisations that spend over £100,000 on fundraising each year to fund independent fundraising regulation. Your annual payment enables the Fundraising Regulator to run its core services. This includes everything we do: from providing guidance during the pandemic, handling fundraising complaints, maintaining the Code of Fundraising Practice and operating the Fundraising Preference Service.
By paying the levy last year, 1,965 larger fundraising charities demonstrated their commitment to good fundraising and can continue to use the Fundraising Badge to prove it. Plus, a further 2,940 smaller fundraising charities and commercial organisations chose to register with us, to show they too are serious about fundraising.
Making sure charities contribute fairly
Levy fees are scaled according to what a charity spends on fundraising. We use the expenditure reported in a charity’s annual accounts to set their fee band, as it directly relates to the activity we regulate. To put this into context, we estimate levy-paying organisations spend over £2 billion on fundraising, and the fees that fund our budget represent 0.1% of that spend.
In April 2021, my team looked at the public accounts of organisations eligible to pay the levy. As you can imagine, this is a complex job and requires us to look at more than just headline figures. As a result of assessing the reported fundraising expenditure in these recent accounts, some organisations will be asked to pay more, and some less, for this levy year but most will see no change.
Overall, 73% of charities should pay either the same or a lower fee. This includes some organisations that will register as smaller fundraising charities, as they now spend under £100,000 on fundraising. Higher education institutions and some arm’s-length bodies will continue to pay a flat rate.
Not all charities fundraise to the same extent, so using audited and publicly available charity accounts to set the levy ensures our process is transparent and fair. Since the regulator was set up five years ago, our levy pricing structure has stayed the same. We haven’t adjusted it due to inflation, and also introduced two lower bands to be fairer to smaller fundraising charities.
Any movements up or down a band for 2021/22 are simply due to changes in what organisations reported they spent on fundraising, as of our April review. When we do our next review of accounts for the 2022/23 levy, an organisation’s levy band may change again.
Good fundraising practices in challenging times
I recognise the last 18 months have been challenging for many and acknowledge those charities that continued to contribute during the pandemic. The fact that 95% of those eligible did support the levy in 2020/21, shows their commitment to good fundraising in testing times.
By continuing to pay, you will give donors confidence that your fundraising is legal and ethical. Remember that levy-paying charities can use the Fundraising Badge to demonstrate their commitment to the code. With more than 6 in 10 people reporting higher trust in fundraisers once they knew about our regulation (1), there’s also potential to grow fundraising opportunities as awareness of the badge increases.
Our role is to ensure regulation is adequately funded
Ultimately, the role of my team is to ensure the regulator is fully funded so we can continue to protect the public and support fundraisers in a changing landscape. The levy fees are transparent and allow us to operate effectively. By checking your published accounts we make sure we place your charity in the right fee band, so those that spend the most on fundraising, pay their fair share towards its regulation.
My team is very willing to speak to anyone that has questions about their levy invoice, which you should receive in late August or early September. In the meantime, you can find further information on our website, or you can email us at firstname.lastname@example.org.
(1) The role of the Fundraising Regulator: public awareness, trust and expectations. Report from the public consultation conducted by Light & Shade Research (July 2019)