The Fundraising Regulator has announced it will increase the voluntary levy it asks charities to pay by up to 50% over two years, following a consultation with the sector.
Its increases, the first in eight years, will mean the largest charities pay £22,500 a year, a £7,500 rise on current rates.
The regulator launched a review into the proposed increase in December last year and received 222 responses.
It decided to space its proposed price rises over two years to “mitigate the impact of the increase”.
The Chartered Institute of Fundraising (CIoF) said it was “disappointed” by the up to 50% increase in the levy and recommended the regulator caps rises at 4%.
Increases of up to 50% over two years
Charities that spend over £50m on fundraising will be asked to pay a new annual fee of £22,500 from September 2025, compared to £15,000 currently, a 50% rise.
Organisations that spend over £7.5m on fundraising will also be asked to pay a 50% higher levy from next year.
Charities that pay £850,000 - £7.5m will face a 30% increase (up to £1,800) and those that pay £100,000 - £850,000 will pay 20% more (up to £300).
However, the regulator is staggering the increases over two years so charities will pay half of the levy rise (10-25% more) from September this year.
The Fundraising Regulator said that after September 2025, further increases will be in accordance with the Consumer Price Index (CPI) to ensure future rises are “more gradual” and charities are given “advance notice” before increases come into effect.
Its levy constitutes the majority of the Fundraising Regulator’s revenue and applies to charities that spend over £100,000 annually on fundraising.
CIoF: ‘We are disappointed’
Claire Stanley, director of policy and communications at CIoF, said: “Although we understand the need to increase the levy and registration fees, this has come at a time when reduced statutory funding and rising costs are making charities of all sizes conscious of their spending.
“And we are disappointed that the increase still represents a 50% rise in levy fee for many fundraising charities, however splitting it over two years may be preferrable to paying it all in one go.
“Going forwards, while we recognise that linking the levy to CPI would potentially make it easier for charities to anticipate future increases and plan accordingly, we do have concerns that this would leave them more vulnerable to inflation – and that in the event of a sharp rise in inflation, as we have seen in recent years, which would cause the CPI to jump up, charities would face very high levy costs at a time when other costs are increasing, services are under pressure, and funding sources are uncertain.
“Taking the views of our members into consideration, our recommendation would be capping the levy increase at 4% – and further modelling to fully understand the impact this will have on charities long-term.”
Lord Harris: ‘Committed to supporting charities’
Fundraising Regulator chair Lord Harris said: “In December 2023 we consulted the sector to seek responses to our proposed changes to the fundraising levy.
“Taking into account the responses received we agreed that whilst the levy will have to go up for the first time in eight years, the proposed increases will be phased in over two years (in September 2024 and September 2025).
“We are committed to supporting charities in this rapidly evolving sector, and tackling the emerging issues that affect public trust in fundraising.
“Simply put, it is the levy that enables us to do this and to continue doing it effectively in the shared interests of charities and the generous public so that there is a continuing positive environment for fundraising to prosper.”
