The Fundraising Regulator did not check the accuracy of the Charity Commission data set which it used to set its levy, and almost 200 charities were wrongly invoiced as a result, internal documents show.
The decision alone has left the regulator with a £300,000 hole in its accounts.
New figures released today, two weeks after Civil Society News contacted the regulator, confirm that just over 200 charities were removed from the scope of the levy and that the potential loss is £312,000.
According to leaked documents seen by Civil Society News, the Fundraising Regulator did not check the accuracy of the Charity Commission data set, but later discovered that due to errors in the annual return data, many of its invoices were wrong.
Inaccuracies in the data led the regulator to invoice charities by the wrong name, send invoices to the wrong address, and invoice charities which no longer exist.
According to the document, which sets out some of the problems the Fundraising Regulator has had with implementing the first round of its levy on fundraising spend; the regulator said it made “a naïve assumption that the Charity Commission data was accurate and checking it was not required”.
However, the data set proved to be inaccurate, bringing “many charities within the levy who should not have been invoiced” and additional costs to the regulator in terms of staff time and administration.
The Fundraising Regulator has so far refused to disclose how much this additional staff time has cost it in terms of budget.
As reported yesterday, multiple sources and documents seen by Civil Society News, show that the first round of the Fundraising Regulator’s levy has only managed to raise £1.75m, more than £500,000 short of the original £2.2m budget target the regulator announced.
Regulator rushed levy because it was ‘running out of funds’
According to the document, the launch of the first round of the fundraising levy by the Fundraising Regulator was rushed because the regulator was “running out of funds”, by late September 2016.
In the same month, it received a data set of over 2,400 charities from the Charity Commission, which had reported fundraising costs in excess of £100,000 in its 2014/15 annual returns.
Considering its precarious financial position and “the tight timescale and lack of staff”, the regulator was unable to “do any quality checks on the Charity Commission data set”.
‘Incorrect completion of annual returns’ by charities
The Fundraising Regulator has blamed the charities themselves for incorrectly filling in their annual returns, and said it had to budget staff time to “analyse over 1,000 sets of accounts”.
In Fundraising Magazine
Civil Society News also understands that similar issues have plagued the Fundraising Regulator’s contact details for registering charities that spend less than £100,000 a year on fundraising activities.
The Fundraising Regulator has released a statement on the levy, which can be read in full here.
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