OPINION: Fundraising regulation owes more than lip service to the rights of beneficiaries

Ian copyIan MacQuillin responds to the Fundraising Regulator’s critique of his and Adrian Sargeant’s recent ideas on fundraising ethics and regulation.

 

The Fundraising Regulator’s policy manager Stephen Service concludes his response to the article on fundraising ethics and regulation that Adrian Sargeant and I co-authored in the Journal of Business Ethics with:

“A balanced approach to fundraising regulation must take into account the needs of both [donors and beneficiaries].”

Well you know what? We couldn’t agree more. This is precisely what I have been saying for three years and is exactly what my theory of Rights Balancing Fundraising Ethics calls for (for a full account of this theory, download our white paper). It’s the clarion call Adrian and I make in the JBE article Stephen is criticising.

But to actually achieve this balance, you need more than words. You need to have in place the structures and frameworks by which you can represent both stakeholder groups and demonstrate accountability to them. This is something that F-Reg (nor other regulators, it’s fair to say) doesn’t have, and it’s a change we called for in our written evidence to the House of Lords Select Committee on Charities enquiry.

You also need to have an ethical and philosophical ethos that facilitates and encourages service to both groups, rather than the consumer protection approach F-Reg appears to have – and Lord Grade did declare a couple of years ago that donors are consumers (which I maintain they are not). Yet the sector’s professional ethics (as fragmented and incoherent as they currently are) upon which F-Reg’s regulatory philosophy is built make the donor the primary and predominant locus of fundraising ethics. It really is little wonder that F-Reg therefore sees its role as protecting donors.

Then, with these two things in place, you need to demonstrate an intention to act in the interests of both groups. Yet F-Reg has repeatedly told us that is role is to represent and speak up for the public, and in Stephen’s Third Sector blog, he reiterates his organisation’s intention to “restore the balance” of regulation in favour of the public.

Banning street fundraisers would probably increase overall utility of the general public. But it’s difficult to see how such a move would be in the interests of charity beneficiaries.

Supporters of the current set up regularly trot out the shibboleth that ‘what’s in the interest of donors is in the interest of beneficiaries’ as a simplistic way to show they are (supposedly) representing both groups. However, that’s an hypothesis that’s easily falsified.

It’s probably in the interest of the public to completely ban street fundraising: most people are indifferent to it and a vocal few hate it with a vengeance (no-one absolutely loves it). So the general utility of the public would be increased by banning ‘chuggers’. But the loss of revenue and the stream of new donors could not be said to be in the interest of beneficiaries, not unless you add on a number of auxiliary hypotheses that long-term trust (and consequently income) increases as a result of street fundraisers being booted off high streets – hypotheses that need sound evidence and argument to support them and cannot just be asserted. Similar convoluted arguments have been advanced to justify the sector’s lemming-like rush to opt-in consent.

 

No return to 2015

We realise that we and F-Reg do not see eye-to-eye on how fundraising ought to be regulated. However, I think Stephen does a disservice to the cause of this conversation by presenting what we have said as a false dichotomy between “turning the clocks back” to the regulatory framework that existed prior to 2015 and what we have now: the choice is clearly not just between ‘what didn’t avert the Fundraising Crisis’ or the Fundraising Regulator.

And, of course, we are not suggesting a return to the status quo ante.

The day our article was featured in Third Sector, I bumped into a fundraiser friend – someone who has never been afraid to stir things up. “I see you’ve called for the code to be returned to the Institute of Fundraising,” he said. I told him we’d said no such thing.

In the past, we have called for a new regulatory system for fundraising modelled on how the advertising industry regulates itself. We have said there should be a Committee of Fundraising Practice (composed predominantly of fundraising practitioners) that sets the professional standards contained in the code, with an independent regulator (which is now F-Reg) that enforces the code – analogous roles to the Committee of Advertising Practice and the Advertising Standards Authority.

If the code were to be returned to the fundraising profession, this would be the kind of set up we would favour.

But why is it important that fundraisers have control over their own standards?

 

The importance of professional autonomy

Fundraising is alone in professions, emerging professions, and occupations that claim to be professions, in that a body external to the profession has the final say on its members’ own professional standards. That diminishes fundraisers’ professional autonomy to use their own specialist knowledge to act in the best interest of the people they represent. In fact, it is almost impossible to see how fundraising in England and Wales could ever be considered a fully-fledged ‘profession’ under the current set up. (See our green paper that explores these issues in more depth.)

We can see a potential clash of cultures looming over F-Reg’s research into what the public considers to be ‘undue pressure’ during a fundraising solicitation.

I had assumed that ‘undue pressure’ would be a ‘man on the Clapham omnibus‘ type benchmark that would be used to assess any complaint, and so any change to the code would be retrospective, advancing and modifying the code according to case law precedent. This also allows ‘undue pressure’ to be assessed in the context of each individual complaint, because what is unduly pressuring for one person in one context may not be for someone else is a slightly different context.

This doesn’t appear to the be the approach that F-Reg is taking though. It appears that F-Reg wants to identify in advance blanket categories of undue pressure.

One of the things that the public have identified as constituting ‘undue’ pressure and “unanimously rejected” is the ‘lifestyle comparison type approach – ‘for the price of a cup of coffee we can provide a mosquito net’ – which, the research says, was regarded as an “excellent example” of intrusion into peoples’ private lives.

Does this mean that, having identified that the public don’t like this type of approach – and given that F-Reg’s role is to speak up for donors and “restore the balance” of regulation in favour of the public – the regulator is going to use this as its authority to restrict this type of approach in any changes to the code?

Ads that compare donations to a lifestyle choice are described in research conducted for the Fundraising Regulator as “excellent examples” of intrusions into people’s private lives that apply ‘undue’ pressure on them to donate.

But we also know that this type of approach is effective at increasing donation levels.

So here we have a potential clash between two regulatory approaches to dealing with this situation.

A self-regulatory approach would see fundraisers use their professional autonomy in how best to balance an effective way to ask while minimising the intrusion felt by (some) members of the public.

An independent regulatory approach that represents the interests of the public could – and I’m stressing could, since we don’t know how F-Reg intends to use the findings of this research – result in the technique being severely restricted so that it becomes far less effective (or even banned entirely).

This may “restore the balance in favour of the public” – F-Reg’s stated aim – but it’s hard to see this as getting the right balance between the interests of the public and the interests of beneficiaries.

 

Regulation for donors and beneficiaries

Our strong preference is for the regulation of fundraising to follow the advertising industry model and return to fundraisers control of their own professional standards. But I’m also aware this is very unlikely to happen and it’s not something we are actively campaigning for (to be honest, it was a fairly throwaway line in the JBE article).

So since that is not going to happen, we shall hold the Fundraising Regulator to Stephen Service’s claim that they will balance their regulatory activities between the needs of donors and the needs of beneficiaries, which will require a genuine shift of ethos away from the consumer protection mindset of ‘speaking up for the public’ and the lip service of claiming that ‘what’s right for donors is right for beneficiaries’.

It’s fantastic news that you want to achieve this balance in your regulation. Now show us how you are going to do it. And show us that you are doing it.

 

 

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