The Fundraising Regulator has published figures showing that only 40% of charities are fully compliant with the Charities Act, as they don’t meet fundraising reporting requirements.
This is a worrying figure, as it means that 60% of charities are missing their statutory reporting requirements. This also means their annual donor reports will lack proper fundraising statements.
The importance of meeting statutory requirements
Statutory requirements for fundraising reports were put in place to protect donors from poor fundraising practice. A lack of compliance doesn’t mean that a charity is misallocating donor funds or committing malpractice, but it does make it difficult to argue otherwise.
Not only is it essential to prove statutory compliance to regulatory organisations, it’s also best practice and will prove your commitment to excellent fundraising. This can only serve to increase the donations that you receive, so compliance is a win-win situation.
What do I need to show to be compliant?
If you aren’t already, you need to explain the fundraising approach you have taken, how third-party approaches were regulated, the number of complaints you have received and how you have identified and safeguarded vulnerable people. Without all of these elements, your reports won’t meet compliance regulations.
This means describing how you’ve managed your fundraising activities, not just the end result. How was your staffing resource organised, what third parties did you involve, and how did this factor into your plans?
Did any third parties undertake fundraising on your behalf? If so, how did you monitor their efforts and ensure standards were met?
No one wants to see complaints come in, but it’s still important to report on them. Include a definitive number rather than using rhetoric; it might be difficult to publish these figures, but it’s essential that you do so.
How have you protected people’s privacy? How have you ensured that there isn’t an unreasonable amount of pressure on people to donate to your campaign? It’s especially important to prove that you’ve put measures in place to protect vulnerable people – this could be in the form of a policy or employee training sessions.
What if I don’t have this information?
Without a robust reporting procedure, there’s no way for charities to prove that their fundraising practices are up to scratch and meet all of these criteria. Over time, poor reporting practices can even erode public faith in a charity. If you can’t prove that donations are being used properly and put towards great fundraising activities, people could be more reserved with their donations in the future.
This is why it’s vitally important to be transparent about your fundraising activities. You don’t want to be part of the 60% in 2020 as the Charity Commission steps up its attempts to clamp down on noncompliant reporting.
How can I ensure compliance?
If it’s not already, your financial management software should help by providing robust support out of the box, along with the facility to create your own reporting criteria. Remember, this is your chance to engage with your donors, so the more relevant you can make your reports to your audience, the better.
We might be able to help you meet your statutory fundraising reporting requirements. With powerful drill-down reporting and a comprehensive organisation-wide overview, PS Financials and the PS Financials suite are the ultimate tool for charity administration and reporting. To find out more, visit our website to discover our industry-leading products.