NEWS: Accountability to beneficiaries requires change of ethos among fundraising regulators

Organisations that regulate fundraising need to move away from a ‘consumer protection ethos’ to ensure that charities can be more accountable to their beneficiaries, Rogare’s evidence to a parliamentary enquiry says.

The think tank’s evidence to the House of Lords Select Committee on Charities enquiry applies the new theory of Rights Balancing Fundraising Ethics to the question of fundraisers’ accountabilities, and how those accountabilities ought to be regulated.

The evidence submission argues that fundraising has been regulated along a consumer protection model that enshrines professional accountability only to donors. However, it argues that ‘consumption’ and ‘donation’ are entirely discrete processes.

• Consumption is a process by which people acquire of goods and services for their own use – a bilateral exchange between the consumer and supplier of those goods and services.
• ‘Donation’ is a process by which people provide resources, which nonprofit organisations then convert into goods and services to be acquired and used by their beneficiaries – a trilateral transfer (rather than exchange) that makes beneficiaries a charity’s real consumers.

Regulation of the bilateral consumption process ensures that commercial marketers do right by their customers and don’t exploit them.

By analogy, regulation of the donation process ought to ensure that charities do right by (and are therefore accountable to) both donors and beneficiaries.

Rogare’s evidence submission says that for fundraisers to be accountable to their donors and beneficiaries under a process of donation, they need the appropriate mechanisms to deliver this accountability through their professional regulator. This requires a change in approach from all bodies involved in regulating fundraising to accept that, in this respect, the role is wider than ‘consumer protection’.

However, beneficiaries’ interests have not featured in the deliberations of fundraising regulators because those regulators have adopted a ‘consumer protection’ ethos to regulate the first part of the donation process (between donor and charity) as if it were an exchange rather than a transfer.

This enshrines plenty of formal mechanisms by which fundraisers are accountable to donors and the public. But there are few, if any, mechanisms by which fundraisers are required to answer for their actions to their beneficiaries, for example, to justify why they chose not to conduct a particular fundraising campaign in the teeth of media criticism.

Rogare’s director Ian MacQuillin says:

“The Fundraising Regulator has said that it will regulate as the ‘voice of the donor’. But were it to adopt a Rights Balancing ethos in regulating the process of donation rather than consumption, that would by definition mean that sometimes it might meed to be the ‘voice of the beneficiary’ in ensuring outcomes were balanced between donors and beneficiaries.”

Rogare’s evidence to the Lords Committee has also been shared with the Fundraising Institute of New Zealand and the Finnish Ministry of the Interior in support of prospective changes to fundraising in those countries.

• Download Rogare’s evidence to the House of Lord’s Select Committee on Charities enquiry
• Download Rogare’s ethics white paper, which outlines the new theory of Rights Balancing Fundraising Ethics.