The effective oversight of fundraising activity: key questions trustees should address

Trustees’ Week is a valuable opportunity to showcase the breadth of work trustee volunteers do for good causes. Without chartered accountants and other professionals contributing their knowledge and expertise to organisational strategies, many charities would struggle to deliver the vital work they do across the country.

Trustees’ Week is also a good time to reflect on trustees’ responsibilities, including the effective oversight of fundraising activity.

Fundraising is not just about generating income (as important as that is for your charity). The way you fundraise is equally important. Trustees should be aware of the standards that apply to fundraising in the UK, as set out in the Fundraising Regulator’s Code of Fundraising Practice (the code).

Complying with the code is essential for making sure your organisation’s fundraising is open, honest, legal and respectful. This in turn helps maintain the public trust in fundraising that the sector has worked so hard to build.

Trustees have ultimate responsibility for their organisation’s fundraising activity, both in terms of strategy and monitoring their charity’s work. Trustees need to be familiar with section 2 of the code, 'Responsibilities of charitable institutions and those who govern them' – a summary of these responsibilities is in this webinar.

If you’re a trustee, at your next board meeting consider raising these questions to help make sure you are meeting your fundraising responsibilities:

• Have you taken reasonable steps to assess and manage any risks fundraising poses to your charity’s activities, beneficiaries, property, work and reputation?
• Is fundraising activity being managed according to your charity’s governing document and relevant national charity law requirements?
• Does your charity use donations and funds for the purpose for which they were given?
• Do you have an effective fundraising policy that includes a procedure for screening prospective partners, as well as for accepting, refusing and returning donations?
• Have you got a clear and publicly available complaints procedure that also applies to businesses, agencies and volunteers (third-party fundraisers) raising funds on behalf of your organisation?
• If you’re not fundraising specialists, has your board taken appropriate advice from subject matter experts?
• Has your charity provided best practice training to staff and volunteers fundraising on your organisation’s behalf?
• Do you closely monitor fundraising activity carried out by and on behalf of your organisation?
• Are you complying with fundraising reporting requirements?

Your charity’s annual report is an important tool to help people understand what your charity does and how it fundraises. Under the Charities (Protection and Social Investment) Act 2016 charities registered in England and Wales with gross income of more than £1 million must also include specific information in their annual reports on their fundraising practice. This includes:

• how the charity monitors fundraising activities carried out on its behalf
• the number of fundraising complaints received by the charity, and
• what the charity is doing to protect people in vulnerable circumstances, among other requirements.

Our analysis of a sample of annual reports filed with the Charity Commission for England and Wales (as of June 2020) found many charities that must report on their fundraising practice by law, had not achieved full compliance with these reporting requirements. Charities of all sizes should refer to our good practice guidance to make sure that they communicate effectively about their fundraising.

Next year, we will be carrying out another review of charity reports to check whether compliance with the Act has improved. Keep an eye on our Twitter feed or sign up to our monthly newsletter for updates.

Trustees are not expected to be fundraising experts, which is why it’s important to take advice when appropriate. But you must be aware of your legal and ethical responsibilities under the code. Fundraising in a responsible way protects donors and helps maintain the public trust that charities rely on.

Getting well acquainted with the code and our accompanying guidance should be part of any trustee’s to-do list. Encourage other board members to do the same so that everyone’s on the same page. Fundraising should always feature as a standing agenda item at your board meetings to help ensure regulatory compliance remains a focal point for your organisation.

To demonstrate their commitment to the fundraising standards, charities can register with the Fundraising Regulator, the independent regulator of charitable fundraising in England, Wales and Northern Ireland. By registering, charities can display the Fundraising Badge on their fundraising materials. To find out more, visit our website.