Changes to charity fundraising practices may be positive, says James Appleton, but will the people developing the new regulations give enough attention to their impact on smaller charities?

In the wake of the scandal around charity fundraising, the recommendations of Sir Stephen Etherington’s report have been widely welcomed by both those within the sector and those on the outside.

The minister for civil society has said he will accept the recommendations in full and the Institute of Fundraising has begun making changes to its code of conduct. The big question now is: how will they be implemented?

Damaging though the scandals have been, they have given the sector a renewed impetus to act in the ethical way that should go hand-in-hand with charitable status, and it will be fascinating to see how well charities respond to the gauntlet laid before them.

What will the change mean for smaller charities?

Some of the greatest impact may be on organisations not directly involved in the scandals: small and medium-sized charities. These are organisations which are extremely unlikely to engage in widespread cold-calling or excessive mailshots, and they are certainly not in the category of charities spending more than £100,000 per year on fundraising which are the focus of the report. In fact, given that less than 3 per cent of charities have a total turnover of more than £1 million, the vast majority of charities are not included within the scope of these stories.

However, the reputational ripples in public trust in the sector have had an effect on those organisations too. Whatever the importance of tighter regulation, increased regulatory responsibility will put a greater strain on resources that are already stretched.

So what needs to happen?

Alongside the recommendations there needs to be a greater emphasis on education. Charity executives and trustees will need to understand the greater regulatory burden they now face – including both the extent of their responsibility and the technical aspects of how to fulfil it. Charity Commission guidance needs to move from base-level compliance to truly supporting organisations to face key challenges, while more funding needs to be available so that charities can strengthen their planning and infrastructure.

There are already some moves in the right direction. Funders like the Big Lottery Fund and the Cabinet Office are offering grants to ensure organisations can review their operations and make changes where needed. However, some of the guidelines are still far too vague. The fact that the Charity Commission is only consulting on a new version of its guidance on fundraising by the end of the year leaves many smaller charities with little support or advice.

We need to tell the small charity story

With all the stories of scandals and the recent revelations over the failure of Kids Company, we need to really educate the public so that they can understand charities better. According to research by LocalGiving, only 37 per cent of local organisations feel that the general public appreciates the work of local charities.

This needs to be addressed, but every tabloid splash about poor charity governance or bad practice erodes trust in all charities; for organisations that don’t have the resources to ride out the storm this is potentially fatal.

Only last week we heard of the closure of Eaves, the charity supporting women who are victims of violence. This is the sad reality for a sector where small charities are increasingly providing key services in the community while experiencing budget cuts.

Charity fundraising is falling in line with the benevolent nature of the charities it supports, but we cannot allow the barrage of press stories to damage organisations doing good work.

The sector will only become stronger if the full spectrum of charities is considered as the recommendations are put into action – if we don’t support these smaller organisations then we could have many more charity closures on our hands.

James Appleton is a project manager at Pilotlight, which links mentors from the world of business with leaders in charity.