Fundraising agencies working with charities are like 'a Wild West' and need strict licensing and regulation, Lord Grade, chair of the Fundraising Regulator, said yesterday.
Grade was speaking at the annual charity conference of the Institute of Chartered Accountants in England and Wales. He told delegates that he was concerned about the practices of private fundraising companies who worked with charities.
Many of the most significant scandals to hit charity fundraising in the last year have come as a result of poor practice by private fundraising agencies.
But the Fundraising Regulator, set up to impose more powerful regulation on the sector as a result of those scandals, can currently only regulate fundraising agencies if they sign up voluntarily.
Grade said there should be a licensing scheme for such agencies.
“It’s a Wild West,” he said. “There’s no regulation. There’s no code of conduct really that’s meaningful.
“I am hoping that out of this will come some form of regulation for private sector fundraising, because what is happening is that there are a lot of cowboys who open up, scorch the earth and break all the rules. You go after them and they just disappear. We’ve got to deal with that.”
Grade said there are some “wonderful” and “very ethical” private companies that “really do a good job, get a sensible return for the efforts they put in and show good returns for charities”, but not all companies behaved that way.
“I’m totally in favour of professionalising fundraising,” he said. “It’s a huge asset to the charitable sector that you can call on private sector expertise to help you raise the money that you need to raise.
“But is does bring a whole new set of dynamics into the equation and you will have cowboys looking to make money. It cries out for licensing and regulation. The faster we get to that, the better.”
Grade hinted that several up-coming cases involving private fundraising organisations would “undoubtedly get some high profile media coverage” and “really heighten the argument in favour of the licencing system of private sector fundraising”.
Grade also warned again that charities must lend their support to the new regulator.
He said the new regulator is a "voluntary and independent" body that currently lacks “statutory teeth”, but if charities fail to support it, statutory regulation would be its “only option”.
“Charities need to support our regulation because if this does not work, statutory regulation will be our only option," he said. He said that if charities did provide support "we will get to a better place where the spirit in which fundraising is carried out is as important as what the law actually says”.
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