A Fundraising Regulator investigation has found that three programmes run by poverty relief charity the Penny Appeal committed five breaches of its code of practice in total.
The regulator found that Penny Appeal’s programmes breached the code on informing donors and treating people fairly, the use of funds and management of fundraising complaints.
Penny Appeal’s Thirst Relief appeal was found to have breached the code regarding direct debits, as the FAQs supporting the campaign were “ambiguous” and did not clarify that a monthly direct debit made to the appeal would continue after 12 months until the donor cancelled it.
Its OrphanKind and Hifz appeals also breached the code as they invited donors to sponsor individual children, implying that the money would be exclusively used to benefit them, rather than benefit them indirectly.
The news comes after a major donor to the charity told the BBC in March that she felt “cheated” by the charity over its delay in building an orphanage to which she contributed £40,000.
A week before that, the Information Commissioner’s Office ordered the charity to stop sending unsolicited marketing messages, after finding it had sent over 460,000 unsolicited texts over 10 days to 52,000 people who had not consented in 2022.
Donations not used in line with conditions
The Fundraising Regulator began investigating the charity after receiving three complaints from long-term supporters and received a fourth complaint during the investigation.
Its investigation report reads: “We found that historically, the charity did not have a robust record-keeping system in place, which resulted in one of the complainants’ donations for a sponsored child not being recorded correctly as Zakat, and administration fees were deducted.”
Though these fees were eventually refunded and applied accurately, this did not guarantee they would be used for the child sponsorship appeal to which the donor had originally donated, the regulator found.
It found that the charity therefore breached the code in how it used donations in line with the conditions attached to them.
Recommendations
The Fundraising Regulator has recommended that Penny Appeal reviews and amend the language used in all its fundraising material to ensure it is clear who benefits from donations.
It also suggested the charity review the way it promotes its Thirst Relief appeal so it is clear what it means if a donor chooses to pay via direct debit.
Fundraising Regulator chief executive Gerald Oppenheim said: “We will continue to engage with Penny Appeal as it implements the recommendations outlined in our decision to ensure its compliance with the code.
“We understand that fundraising appeals encouraging donors to raise money for a particular individual can be very effective.
“However, we urge all charities that pool the money raised through such appeals to ensure their fundraising material clearly reflects this and informs donors that their donations may not be used exclusively for the benefit of a specific individual or project.”
Penny Appeal: ‘We have reviewed our communications’
A spokesperson for the Penny Appeal told Civil Society that it had already implemented several recommendations made by the regulator including a review of its communications.
“As an international charity organisation that works to provide relief to poverty-stricken communities, we are constantly seeking new ways to improve our processes and enhance our communications and we wholeheartedly welcome the recommendations provided by the Fundraising Regulator, which assist us in carrying out our life-changing projects,” they said.
“Transparency and clarity are at the forefront of everything we do, and we are keen to carry on working on improving and refining our processes in all areas of our work as we continue in our mission to support those most in need.”
