- On 18 January 2018 a fundraising event was held at a London hotel by the Presidents Club Charitable Trust (the charity). The purpose of the event was to raise funds for the charity for distribution to a range of other causes benefitting disadvantaged and under privileged children.
- Following the event, reports emerged in the media of allegations of inappropriate behaviour on the part of some of the guests.
- We have sought to understand the nature of the event, how and by whom it was organised and delivered and whether those responsible for organising and overseeing the event understood the relevant legal obligations and best practice when fundraising.
Our role and remit
- The Fundraising Regulator is responsible for the regulation of all types of charitable fundraising in England, Wales and Northern Ireland. We were established following the cross-party Parliamentary review of fundraising regulation (2015), with the remit to strengthen the regulatory system and restore public trust in fundraising.
- Part of our role is to investigate cases where fundraising practices have led to significant public concern. We do so by considering whether the fundraising organisation has complied with the Code of Fundraising Practice (the Code), which outlines the legal requirements and best practice expected of all charitable fundraising organisations across the UK.
- We are funded through a voluntary levy on charities spending £100,000 or more each year on fundraising. We also invite charities spending less than £100,000 a year on fundraising to register with us and by doing so to demonstrate a commitment to the system of regulation for fundraising and to improving fundraising practice within the sector.
- The reports of the behaviours that were alleged to have taken place at the fundraising event held by the charity gave rise to significant public concern. We therefore opened an investigation into the charity to determine whether key principles outlined in the Code were adhered to at the event in question and whether the charity had appropriate systems in place to commission and monitor fundraising undertaken on its behalf.
- Part of our role is to improve fundraising practice across the sector. We consider that this case highlights lessons relevant to other charities, which is why it is important to put our findings in the public domain.
The Code of Fundraising Practice and the Charity Commission’s guidance
- The Code of Fundraising Practice outlines the standards expected of all charitable fundraising organisations across the UK. The standards were originally developed by the fundraising community through the work of the Institute of Fundraising (IoF) and Public Fundraising Association (PFRA). The Code transferred from the IoF to the Fundraising Regulator at our launch in July 2016.
- Some areas of the Code refer specifically to requirements set out in legislation, for example, the Charities Act 2011. Other areas refer to the professional standards and best practice expected of fundraising organisations.
- The Charity Commission’s guidance ‘Charity fundraising: a guide to trustee duties’, commonly referred to as CC20, refers to the need to be aware of, and comply with, the Code in a number of areas. It outlines what charities and trustees need to consider when fundraising; and notes that charities should follow the law and recognised standards when fundraising in order to protect charities from undue risk and show respect for donors, supporters and the public.
- Section 3 of CC20 outlines six principles trustees should follow, one of which is ‘Identifying and following any recognised standards that apply to your charity’s fundraising’. This section refers specifically to the Code of Fundraising Practice and the Commission’s expectation that charities should fully comply with both the legal rules and the standards outlined within the Code.
- Section 5 of CC20 focuses on the supervision of fundraisers and the need for trustees to take responsibility for their charity’s fundraising. This section of the guidance specifically refers to working with commercial partners and signposts trustees to the Code for further guidance.
- The Code of Fundraising Practice is underpinned by four key principles, namely that the work of fundraising organisations should be ‘Legal, open, honest and respectful’.
- Specific best practice provisions within the Code that we consider relevant to this case are found in Sections 1 and 4 of the Code.
- Section 1.2(i) of the Code states that ‘trustees of Charities (or for Charities without a Trustee Board, those who serve on its governing body) MUST have regard to national guidance in overseeing the fundraising activities of their Charity and any third parties fundraising on the charity’s behalf’. This section of the Code refers specifically to the Commission’s guidance for trustees (CC20).
- Section 4.2(a) of the Code states: ‘This section outlines standards involved in working with third-parties, including consultants, freelance fundraisers, agencies and suppliers, as well as the standards expected of them. Organisations MUST require the adherence of third-parties to the Code.’
What we have investigated and why
- Charities do not merely have a responsibility to ensure any fundraising they undertake is done so in accordance with the Code. They also have a responsibility under the Code to ensure that third-parties acting on their behalf observe the Code when undertaking fundraising.
- We understand that the event was organised and overseen by the trustees of the charity who contracted a third-party events agency to provide staff for the event. We also understand that part of the role of the staff working for the third-party agency was to engage in and encourage fundraising with the attendees. These activities therefore fell within the Code.
- Trustees have a responsibility to ensure fundraising is undertaken in accordance with the legal requirements and best practice as outlined in the Code. This includes ensuring that third‑party organisations fundraising on behalf of the charity, in this case the third-party agency, are made aware of the need to follow best practice as set out in the Code when fundraising. Trustees also have a responsibility to monitor any fundraising being undertaken on behalf of the charity.
- We did not receive any complaints about the alleged inappropriate behaviour, which in any event would be for the Equality and Human Rights Commission and/or the Charity Commission to consider. Whether or not the allegations are substantiated, the damage to the reputation of the Presidents Club, other charities involved as recipients and public confidence in fundraising more generally was considerable.
- Our investigation has focused therefore on whether the trustees understood and undertook their responsibilities as outlined in the Code when organising and overseeing the event and engaging and monitoring the third-party agency contracted to provide staff for the event - in particular, their responsibility for protecting the charity’s reputation and taking account of the CC20 guidance on fundraising and of the Code.
The investigative process
- We asked the trustees to provide relevant documentation to assist our investigation. The purpose of our request for information was to allow us to consider whether the charity could demonstrate that it had an understanding of the Code and had taken steps to ensure that any fundraising was undertaken in line with the legal requirements and best practice.
- Following discussions with the trustees, the charity provided the following documentation: the contract with the third-party agency that engaged the event staff; the fundraising materials produced for the 2018 event; and information regarding the assessment of the event that had taken place in 2017 – which also included plans for the event in 2018.
- The trustees confirmed that there was no written fundraising policy in place for the event.
- The trustees told us that experience of organising the event had accumulated over many years but had not been codified into a written set of procedures. They also confirmed that they did not employ any professional fundraising staff or engage any professional fundraising advice; and that, on the night, the event was supervised by the three trustees. They also said that they were unaware of the Fundraising Regulator’s role and largely unaware of the Code of Fundraising Practice, believing that it was probably not relevant to this kind of event.
- The trustees also told us that the funds raised are not earmarked at the event for named charities, but rather for the charitable cause (disadvantaged and/or under privileged children). Allocation and distribution takes place once the funds have been collected.
- One of several auction lots was provided by a charity that had previously received funding from the Presidents Club.
- We understand that the charity’s trustees were supported by a committee in the planning and organisation of the event and in assessing the success of previous events.
- We have seen no evidence that consideration was given when planning the event to the need to ensure that fundraising was undertaken in accordance with the Code. In fact, it appears that the trustees were simply not aware of the requirements and best practice set out in the Code. We cannot, therefore, be satisfied that the charity fully complied with the Code.
- It is also clear from the information provided that the charity employed a third-party agency to engage the staff at the event and that the staff were participating in fundraising.
- We have seen no evidence to suggest that an appropriate written fundraising policy or procedure was in place at the time of the fundraising event, nor is there any reference to the need to adhere to the Code in the contractual arrangements with the third-party agency. We note what the trustees have told us about how the event has developed over the years. However, we do not consider that negates the need for a written fundraising policy to be in place in order to ensure that all those involved were aware of the standards expected.
- It is important for all charities to be aware that the retaining of third-party organisations in delivering a fundraising event does not remove the need for both the third‑party and the charity engaging that third-party when fundraising to be aware of, and comply with, the Code.
- It is the responsibility of trustees to ensure that fundraising is undertaken in accordance with the Code and in doing so charities have a responsibility to ensure that the contractual arrangements in place reflect the requirements and best practice set out in the Code and to monitor those third-parties who are fundraising on their behalf.
- We note that the trustees have told us that they (and security staff) were present and monitoring the event. However, we do not consider that informal monitoring to be adequate. We have seen no evidence that any formal monitoring or supervision took place in respect of the fundraising undertaken on behalf of the charity by the third-party agency at this event.
- In the light of these findings, we consider that the charity was in breach of Section 1.2(i) and Section 4.2(a) of the Code.
- We have not seen any evidence that the charity intentionally ignored the requirements and best practice outlined in the Code. Rather, it is clear from our discussions with the charity and the responses we have received to our requests for evidence that the trustees were not aware of their responsibilities under the Code.
Learning for the sector
- We have not made any specific recommendations in this case, since the trustees have decided to close the charity. However, we consider that there are some lessons arising that charities across the sector should consider when undertaking fundraising.
- Under the Code, charities have a responsibility to ensure fundraising is undertaken according to best practice and to monitor fundraising when it is being undertaken either by their staff or by third-parties on their behalf. To do so adequately, trustees should ensure that there are policies and contractual arrangements in place and that those documents reference and reflect the requirements and best practice set out in the Code. It is also necessary for charities to have in place processes that allow them to monitor those third-parties who are fundraising on their behalf.
- In this case, we were concerned at the lack of awareness on the part of the charity of the standards set out in the Code, particularly given that the charity has been undertaking fundraising for over 30 years and in that time has raised a substantial amount of money for a range of charities benefiting disadvantaged and/or under privileged children.
- We recognise that the sector is hugely diverse in terms of the size and scale of the charities we regulate and the fundraising that is undertaken. We, therefore, take a pragmatic and flexible approach when regulating the sector. We do not expect all charities who fundraise to have in place detailed policies and procedures that reference all aspects of the Code. However, we do expect charities and fundraising organisations to recognise and reference their responsibilities under the Code in their fundraising strategies and policies and in any contractual arrangements with third-parties engaging in fundraising on a charity’s behalf. This includes recognising and referencing a charity’s responsibility to monitor fundraising at events such as this one, to help ensure that it is properly conducted.
- Whether charities are large or small and whether they employ paid staff or are solely managed by volunteers, trustees have the same obligations to ensure they are aware of their responsibilities and best practice when fundraising.
- We recognise that special events and gala dinners take place frequently and are organised by charities of varying sizes. A key lesson from this case is that, even for a charity that holds a single, annual, fundraising event, there is the same necessity to comply with the requirements and best practice set out in the Code.
- We also consider that there is a lesson in this case for charities that benefit from these kind of events. We recognise that there is a distinction to be made between charities involved in arranging such events, charities that are associated with such events, for example, by attending the event or providing a prize, and those charities that make an application for funding following an event.
- Charities who apply for funds raised at an event such as the one held in January 2018 are not directly accountable for ensuring that the fundraising was undertaken in accordance with the Code. However, trustees do have a responsibility to protect the reputation of their charities and, with that in mind, should consider what due diligence they might undertake when offered the opportunity to be publicly associated with a fundraising event either by attending or providing a prize or auction lot. Similarly, charities who apply for funds following such an event should carefully consider what assurance they have that the fundraising was undertaken in accordance with the Code in order to avoid risks to their own reputations.
- We hope that putting our findings into the public domain will remind organisations, particularly registered charities, of their obligations and the guidance that is available to them when fundraising.
- We understand that the trustees of the charity are now seeking to collect the donations pledged at the event for distribution before closing the charity.