OPINION: The groundbreaking opportunity awaiting the new Fundraising Regulator

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While the FRSB can consider itself hard done by in Sir Stuart Etherington’s review, Ian MacQuillin says the new Fundraising Regulatory can learn from FRSB’s failings to create the world’s first bespoke model of fundraising regulation.

The Fundraising Standards Board has probably received more support and sympathy now that it is going to be abolished than it ever had when it was in existence. Ironic, isn’t it?

Sir Stuart Etherington’s review of fundraising self-regulation has been harsh on the FRSB. It’s being blamed for not having achieved things that were never within its remit and that it never had the authority to do. It’s not the fault of the FRSB that it didn’t have universal coverage when it was established as a voluntary membership scheme. Neither is it the FRSB’s fault that it didn’t impose tougher sanctions on miscreants than it actually had in its armoury.

However, while I genuinely think the organisation has done a decent job in fulfilling its remit and has been harshly treated by the review, I shan’t be shedding any tears over its abolition.

‘The FRSB chose to be a poor imitation of the ASA. And now it’s paid the price for that lack of vision and innovation.’

Sir Stuart proposes a new regulator that will have all these extra powers – and more, it’s also going to take charge of the code of practice. Of course, the review could have ensured some continuity and avoided and the cost and uncertainty of establishing a new regulator from scratch simply be giving the FRSB the extra powers it needed.

But Sir Stuart says it’s time for the FRSB to go because it has lost the trust of other players in the sector.

How and why it lost that trust are important lessons that the new regulator – The Fundraising Regulator – must take on board if it is to avoid making the same mistakes that the FRSB has made.

The fundraising regulation civil war of 2015

The events since the death of Olive Cooke in May brought to a head the civil war that has been fought in fundraising for a number of years between the FRSB and the Institute of Fundraising (IoF) over who should control the code of practice. For a long time, the FRSB has lobbied to have the code taken away from the IoF and given to the FRSB. This would have been a terrible idea. For a start, there should be a clear separation between the body that writes the code of practice and the body that regulates against. This is a model used in the advertising industry, where it clearly works and everyone understands it. (This is not what’s proposed for fundraising, as the new Fundraising Regulator will take over the code from the IoF.)

Second, as I shall go on to explain, I would never have trusted the FRSB to run the code responsibly and in the best interests of the fundraising profession and its primary constituents – charity beneficiaries and service users.

But to fight a war you need two sides. In the red corner is the Institute of Fundraising, which has jealously guarded its ownership of the code of practice, and has fought hard against the FRSB taking control of the control of the code to point that this appears to have been one of the organisation’s strategic objectives. Sir Stuart has recommended that the IoF lose ownership of the code, but the organisation seems strangely unperturbed by this development, despite having fought so hard to keep it. Is it because the news is tempered by the fact that the FRSB will not be getting its mitts on it?

This summer the covert guerrilla war the two sides have fought against each other spilled over into pitched street battles.

Divide and rule
Well, quite!

It was an unedifying site in which the IoF and the FRSB jostled to protect their own primacy (as they saw it) in fundraising regulation, with the FRSB seemingly only to happy to play the media card in response to all the negative press coverage fundraising received over the summer.

The bodies involved in fundraising regulation could not develop a unified front. And a house divided allows an emperor to indulge in a nice little game of divide and rule, playing off one faction against the other, which is what happened, and it remains to be seen what long-term damage will be wreaked on the fundraising profession as a result.

The FRSB went along with the government’s divide and rule strategy, gambling that lobbying against the IoF over ownership of the code would work in its favour. But it didn’t – FRSB’s mistake was probably in lobbying for the code not only to be removed from IoF, but also transferred directly to the FRSB – and the organisation is now paying the price for having backed the wrong horse. Or maybe that should be having backed the wrong greyhound.

So the Fundraising Regulator (what’s the abbreviation going to be – TFR, F-Reg? I quite like F-Reg) won’t find itself in the same conflict that FRSB allowed itself to become embroiled in.

However, F-Reg (let’s see if I can get this to catch on) will face other significant challenges relating to the code of practice.

Are the spores of conflict still buried within F-Reg?

The code is to be set by a separate committee (the Fundraising Practice Committee) to the committee that regulates the code (the Complaints Committee) (see page 55 of the Review).

There is the question of how much representation the fundraising profession will have on this committee and where that representation will come from? Will it simply be a transfer of the IoF’s standards committee, along with its recently-recruited lay members and independent chair? Or will F-Reg seek new and wider professional representation, ensuring the likes of the Charity Retail Association, Association of Fundraising Consultants, Remember a Charity, as well as bodies such as the Direct Marketing Association and Textile Recycling Association, are represented? As F-Reg will be a completely new body, perhaps the thing to do would be to establish a completely new committee to maintain the code. What’s important is the calibre of the fundraising professionals on this committee, not which organisation they previously represented.

Then there is a question of how independent and how much autonomy (or how little) the Fundraising Practice Committee will have? Will it have the authority to write its own code or will it have to do what Complaints Committee tells it to do? The question arises of what happens when the Complaints Committee wants (instructs?) the Fundraising Practice Committee to make changes to the code the fundraising professionals on the committee believe would be harmful to professional practice.

And then there is the question of trust. F-Reg will be regulating its own rules. There is always a question of trust when that happens. Suppose F-Reg repeatedly finds against complainants? At what point to people start moaning: ‘well what do you expect, they set the bloody rules in the first place?’ And if they do, how does F-Reg react. Does it stick to its guns and risk a diminution of trust in its role, or does it order a change to the code in an attempt to shore up public trust?

So while the conflict over code control will not be fought between two discrete organisations, the spores that led to the loss of trust in the FRSB lie dormant in the Chinese wall of indeterminate thickness that will be built between F-Reg’s two committees.

This brings us to the greatest lesson that F-Reg can take from the ultimate failure of the FRSB.

FRSB’s missed opportunity to lead the world in self-regulation

Ever since the FRSB was formed, those running the organisation, and just about everyone else, has assumed that fundraising regulation is a direct analogue of other types of consumer protection.

Consumers need to be protected from marketers who might otherwise exploit them to increase their profits, such as sell them substandard goods (a car with fraudulent emissions monitoring, for example). Donors don’t need this protection because charities cannot exploit them in this way. So they require a much more sophisticated form or regulatory protection.

‘Charity beneficiaries were simply invisible to the FRSB: it never thought charity beneficiaries were in any way relevant to its mission of protecting donors from ‘aggressive’ fundraising.’

The FRSB, however, always saw itself as a consumer protection agency, putting the rights of the customer (in this case, donors) above all else. It was clear in the way the FRSB was first established, without a single professional fundraiser on its adjudications board, and in some of its early pronouncements in which it seemingly went out of its way to solicit complaints from the public about fundraising. And it is evident in the comments that its new chair Andrew Hind made to the Public Administration and Constitutional Affairs Committee last month.

Adnrew HInd
Andrew Hind: IoF was ‘weak’ for not acting in donors’ interests.

Hind said that the IoF was “weak” because it had “failed to outlaw practices that the public find completely unacceptable”. These are the comments of someone whose only constituent is the public. Why would the IoF outlaw something such as street fundraising, even if large swathes of the public appear not to like it, when it is a successful form of donor acquisition? But from the public’s perspective, then yes, you want the FRSB to act on your behalf to remove those pesky ‘chuggers’ from your walk down the high street.

This is why I said I would never have trusted the FRSB to own the code of practice, because I would not have trusted them not to protect donors-as-consumers’ interests at all costs (because FRSB is a consumer protection agency), at the expense of beneficiary interests.

Charity beneficiaries were simply invisible to the FRSB: it never thought charity beneficiaries were in any way relevant to its mission of protecting donors from ‘aggressive’ fundraising.

Because the FRSB saw itself as a consumer protection agency, it never seized the opportunity to create a bespoke form of regulation that protected donors from excessive fundraising while simultaneously protecting the needs of beneficiaries to have someone ask for help on their behalf (which is what Rogare’s review of professional ethics is attempting to do).

This was FRSB’s signal failure. It could have created something that hasn’t yet been seen anywhere in the world – a model of self-regulation formulated specifically to deal with the unique challenges that arise when people ask other people to donate to charity. Instead, the FRSB went to the consumer protection section at B&Q and took off the shelf a prefabricated kit of a model of regulation for a scenario in which people ask other people to buy something for themselves.

The FRSB could have been groundbreaking, something like a Fundraising Stewardship Board rather than a ‘standards’ board. But it chose to be a poor imitation of the ASA. And now it has paid the price for that lack of vision and innovation.

The Fundraising Regulator should not make the same mistake.

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