New fundraising rules bring an opportunity to build trust
December 05, 2017
New fundraising rules in the Charities Act 2016 mean that many charities are now having to report on their fundraising practices formally for the first time.
It might be tempting to do the bare minimum required but charities should think about the benefits of doing more. They have a powerful opportunity to restore some faith in the sector by including insightful information about how and why they fundraise, and how they subsequently use those funds. They could also embrace the chance to objectively assess their fundraising activities and whether they still support their fundamental values and objectives.
When we wrote about fundraising disclosures last year, after reviewing charities’ trustees’ annual reports and accounts for the ‘Excellence in Reporting’ in Charities Award, we noted only a very small number of charities discussed the issues surrounding fundraising beyond a generic statement or at all. This year we saw significant improvement. However, many charities continued to barely mention the topic and they will need to expand on this next year in order to meet the new rules.
The best went further than simply following the new rules though, giving a rounded view of their fundraising activities. Most notably, these charities explained the reasons for their choice of fundraising methods. They included their ethical perspective, demonstrating the values of the charity, but also discussed value for money to demonstrate they were using their funds effectively. They also celebrated the role that fundraising plays in establishing relationships with their supporters and explained the crucial part that fundraising has in enabling their charitable activities.
Charities looking to prepare similarly insightful reporting on this topic should ensure that they answer the following key questions in their reporting:
- Why do we fundraise in the way we do?
- How do we make sure we, and those who fundraise on our behalf, are responsible fundraisers?
- How does fundraising support our strategy and how could fundraising risks impact on our ability to deliver our strategy?
- What promises do we make to our supporters and how do we ensure we fulfill our promises?
- How do we demonstrate we are listening to feedback?
Charities should also consider whether their fundraising practices are still operating as expected in this changing environment, for example through their internal audit function, and how this is communicated to the people that matter.
Charities, individually and the sector as a whole, have the opportunity to be bold and brave about a topic that has recently caused a lot of controversy. Charities that articulate a clear and compelling narrative about how and why they fundraise demonstrate to the public that they are willing to share information and are open to scrutiny. This openness builds trust and may in turn encourage new or existing supporters to contribute further.