Charities Aid Foundation has agreed to provide bridging finance to help set up the new Fundraising Regulator and will open an account to hold in trust any contributions for its establishment from fundraising charities.

CAF chief executive John Low made the offer during early discussions about the setting up of the new regulator recommended by Sir Stuart Etherington’s fundraising review. 

According to a CAF spokeswoman, Low offered to provide sufficient working capital via a loan or overdraft facility in order to enable the regulator to launch while contributions from charities were being sought.  The request for seed funding has been made by the Institute of Fundraising to the biggest fundraising charities and has reportedly been received positively.

“But we knew there would be a bit of a lag between the request for funds going out to charities and the money coming in, so we agreed to provide a bridging facility,” the spokeswoman said.

She did not say how much CAF would stump up but recalled that the original estimate for the cost of the new regulator was in the region of £700,000, some of which would be provided by the Cabinet Office and some by the sector.

Asked whether the bridging finance would be provided on an interest-free basis, the spokeswoman said the terms and conditions are still to be determined but CAF would cover any administrative costs incurred in the set-up.

CAF has also offered to collect the contributions from the charities and hold these funds in trust until the Fundraising Regulator is constituted as an entity and the money can be transferred over to it.

Now that Lord Grade has been appointed as the regulator’s interim chair, conversations would take place with him imminently to thrash out the details of the financing.

Sir Stuart Etherington, architect of the new Fundraising Regulator, praised CAF’s “helpful” offer. In a letter to NCVO members and others who had been in touch with NCVO regarding the Fundraising Review recommendations, Sir Stuart Etherington wrote: “You may have seen that the Institute of Fundraising/PFRA have asked the largest fundraising charities to contribute set-up costs for the new regulator.

“In addition, the Charities Aid Foundation have agreed to hold the funds in trust and provide a working capital facility, in order to help establish the new body. These are helpful steps to ensure that the new regulator can start its work as soon as possible.”