New Fundraising Regulator goes live and consults on fees

On 7 July 2016, the Fundraising Regulator took over from the Fundraising Standards Board (the FRSB); it also assumed responsibility for the Code of Fundraising Practice from the Institute of Fundraising, and the street and door-to-door fundraising Rule Books (from the Public Fundraising Regulatory Authority).

Around the same time, it published a discussion paper outlining its intended fee structure. The consultation closed on 22 July: what follows is a summary of the proposals.

The Regulator has adopted the recommendations of the Etherington Report, in that:

• it suggests that funding should come primarily from a stepped levy on charities whose annual fundraising expenditure exceeds £100K; and
• that the amount of fundraising expenditure should be based on figures declared by charities in their Annual Returns (it suggests using figures for the year ending 31 December 2014).

In addition, it proposes that:

• the levy be fixed for almost three years (until March 2019) to allow charities and the Regulator to plan financially with some certainty;
• some exempt charities should pay a flat rate levy of £1,500 per annum – the consultation mentions English universities in this context;
• smaller charities and fundraising agencies should be able to register for a small annual fee. For charities, the fee will be £50; for fundraising agencies it will be £250.

The levy

The Regulator considered three ways of calculating the levy; its preference is for a banded fee structure. Under this model, the largest levy amount will be £10K (for charities whose fundraising expenditure exceeds £20M) and the smallest will be £250 (for charities with £100K-£150K annual fundraising expenditure). For levy-paying charities, the registration fee will be included as part of the levy.

The consultation notes that the regulation system is voluntary, but reminds readers that the Charities (Protection and Social Investment) Act 2016 gives the Government a power to create regulations to make payment mandatory. Short of that, the consultation states that the Regulator may publish a list of charities that do not pay the levy.

Benefits of registration

Organisations that register will have to agree to a set of terms and conditions about their commitment to the Code of Fundraising Practice and will be able to use a 'badge', which will presumably perform a similar role to the FRSB's "tick". Details of how to register (and what registration means) will be available in the autumn, but the consultation says that registration will indicate:

• a commitment to best practice;
• a commitment to donors;
• public accountability;
• public awareness of fundraising regulation;
• support for fundraising regulation.

The consultation asked various questions, such as whether £100K was the right threshold, whether its preferred levy model was the best option, whether the banding was set at the right levels and whether the flat rate charges for other organisations were appropriate.

You can still read the discussion paper here. The Annex showing fee tables for the various levy options (including the flat rate for charities and fundraising agencies) is here.

We will report on the outcome of the consultation when the results are available. In the meantime, you can find out more about the Fundraising Regulator by browsing its website.

If you require further information on anything covered in this briefing please contact Rachel Holmes ([email protected]; 020 3375 7561) or your usual contact at the firm on 020 3375 7000. Further information can also be found on our Schools page.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2016