The Fundraising Regulator has reported that activity by community interest companies (CICs) generated more than one in nine (12%) of the complaints it received last year, potentially threatening the charity sector’s reputation.
Its annual complaints report, published today, says that 54 out of the 455 complaints received by the regulator from 1 April 2023 to 31 March 2024 were related to a small number of CICs, which are not registered charities.
Concerns related to CICs involved negative fundraiser behaviour, pressure to donate, inadequate licenses and permissions, and misleading fundraising practices, the report says.
Meanwhile, misleading information and door-to-door fundraising were some of the main causes of complaints about registered charities.
Misleading information and door-to-door fundraising draw complaints
The report analyses both complaints made to the regulator directly from members of the public and fundraising complaints received by 53 of the UK’s largest fundraising charities.
Misleading information was the top reason why complaints were made to the regulator, comprising 15% of those raised, with digital fundraising seeing the most complaints about misleading information.
The methods most complained about to the regulator were once again charity collection bags, addressed mail, and digital marketing.
Meanwhile, door-to-door fundraising drew the most complaints to the largest fundraising charities, making up 22% of all complaints reported by the sample charities.
Door-to-door fundraising has been in the top five most complained about methods to the sample charities in the previous four years, with complaints rising as activity has increased since the Covid-19 pandemic.
After door-to-door, fundraising by addressed mail received the next highest number of complaints to the sample charities, followed by challenge and sponsorship events.
‘Poor practice by some CICs threatens reputation of charitable fundraising’
Jenny Williams, chair of the Fundraising Regulator’s complaints and investigations committee, said: “The report highlights the need for those engaged in charitable fundraising to monitor their fundraisers’ behaviour, particularly that subcontracted to agencies, and investigate any complaints made promptly.
“The report also discusses the emergence of a significant number of complaints related to a few CICs. Poor practice by some CICs not only puts the public at risk it also threatens the reputation of charitable fundraising more generally.
“We will continue to work with other authorities and regulators to ensure that CICs are aware of and comply with the Code of Fundraising Practice.”
In response to the report, Social Enterprise UK director of policy and research Emily Darko said: “CICs may make up around 15% of organisations likely to be fundraising.
“The report’s figures suggest around 12% of complaints relate to CICs, so it’s not clear that there is a particular issue in terms of the proportion of complaints.
“In any case, we would hope the CICs who have been the subject of complaints are thoroughly investigated.”
In the UK, there are more than 32,500 CICs, which are social enterprises registered with the CIC Regulator instead of the Charity Commission.
Last year, the CIC Regulator received 34 complaints and did not launch any formal investigations.
Louise Smith, who is the regulator of CICs, said in response to the report: “Since 2023, the Office of the CIC Regulator and the Fundraising Regulator have worked closely to address emerging issues that have arisen in relation to community interest companies and fundraising.
“I remain committed to ensuring CICs continue to meet the requirements of the CIC legislation and encourage them to comply with the requirements and legislation of other regulators in all their activities.”
Smith is also chief executive of Companies House, which the government recently proposed merging with the CIC Regulator.
On the potential merger, the CIC Regulator said in a statement: “We would like to take this opportunity to reassure our customers that for the time being it will be business as usual within the Office of the CIC Regulator, and your obligations and duties as a CIC remain the same.”
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