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Changes in the Regulation of Charity Fundraising (Charities Act 1992 and Charities Act 2011)

March 2016

Important changes to the regulation of charity fundraising will take effect from 1st April 2016.

Government review of charity fundraising law

The background is that fundraising practices by charities and their agents came in for strong criticism by the media and in parliament during 2015. In particular, there was considerable concern about how charities make contact with potential donors. There was evidence that in some cases it amounted to harassment. As a result the Government held a review of charity fundraising practices and the review body reported in September 2015.

The Government has decided to implement all of the recommendations set out in the report of the review. The recommendations include the principle that there should be external regulation (not just self-regulation) of charities’ fundraising activities, greater responsibility on charity trustees and senior managers of charities for fundraising activities, introduction of a new fully independent Fundraising Regulator (in place of the Fundraising Standards Board which is a trade body for charities) with more power over charities, and a new ‘Fundraising Preference Service’ for the public to opt out of fundraising communications.

Details of changes in the law

In parallel with its review, in 2015 the Government also initiated some changes to charity law (including changes to certain aspects of charity fundraising). Those changes are made by the Charities (Protection and Social Investment) Act 2016 which will come into effect on 1 April 2016.

The 2016 Act gives greater powers to the Charity Commission over charity trustees (and these include powers specific to fundraising activities). The Commission will be able to issue warnings and directions to trustees defaulting in their duties (not just their duties relating to fundraising), and, as appropriate, suspend, remove or disqualify trustees. The Act also provides for Regulations to be made which would require charities to abide by the new Fundraising Regulator’s guidance and requirements.

Specifically in relation to fundraising, the 2016 Act amends Section 59 of the Charities Act 1992 and Section 162 of the Charities Act 2011. The changes made by these amendments are as follows:

• Section 162 of the Charities Act 2011 now requires annual reports of charities to include a statement on their approach to fundraising (and in particular whether a professional fund-raiser or commercial participator carried on any of those activities), whether the charity monitored activities carried on by any person on behalf of the charity for the purpose of fund-raising, what they have done to protect vulnerable people, how many complaints they have received, and other information about their fundraising activities.

• Section 59 of the 1992 Act now requires Agreements with professional fundraisers or commercial participators to include details of how vulnerable people will be protected from unreasonable intrusion, unreasonably persistent approaches, and undue pressure. It also now requires Agreements to refer to any voluntary scheme by which the professional fundraiser or commercial participator agrees to be bound.

Updating forms of fundraising agreement

We have amended those forms of Agreement in our Charities and Non-profit group which are affected by the relevant changes in the 2016 Act. They should be used on and after 1 April 2016 (the date when the changes come into effect) but they may be used before that date. As a result of the updates we have made to those forms, they all now comply fully with the new legal requirements.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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