Recent report from the Fundraising Regulator urges charities to review their sub-contracted face to face fundraising contracts

In March 2024 the Fundraising Regulator published a report on its investigation into sub-contracted fundraising conducted by paid agency workers. The regulator had received a number of complaints about

• Inadequate measures to identify vulnerable donors;
• Disrespectful treatment and excessive pressure put on vulnerable donors; and
• Insufficient training and monitoring by charities, enabling such behaviour.

The report explains that although face to face fundraising is in greater demand, and there’s been a 62% increase in sign-ups from door-to-door fundraising, the capacity of in-house fundraising teams has been exceeded and demand on agencies has increased. Agencies have recruited rapidly, often individuals from industries where a commercial, pressurised approach is normal. The regulator received a range of complaints and in response it has published its investigation into subcontracting in general and has launched enquiries into the individual charities and agencies involved.

Public trust in charities is fragile, and is easily damaged by cases such as Hospitals Charity, where third party professional fundraisers did not comply with the correct rules, misleading the public. This is why it is so important that any public facing fundraising is conducted to the highest standards. Charity trustees retain ultimate responsibility for their charity’s reputation, so even where fundraising is subcontracted, they will be responsible for the impression that fundraising leaves. They cannot delegate this responsibility.

The report makes a series of recommendations for all stages of a fundraising contract.

1. Planning

       a. Due diligence

Before signing up with a fundraising agency trustees should look at the Code of Fundraising Practice (7.1.1) and follow its advice about ensuring the charity signs up with a respectable agency. Any subcontracting below the original agency should be held to the same high standards.

2. Payment models

Payment models based on performance could inherently encourage more high-pressure sales behaviour. The report is not prescriptive but recommends trustees agree on a payment model that aligns with their charity’s ethos. A living wage should be prioritised.

3.  Registration with Fundraising Regulator and Chartered Institute of Fundraising

It is best practice for all agencies to be registered with the Fundraising Regulator and Chartered Institute of Fundraising – this should be established at due diligence stage and a term of each contract. Tellingly, the report explains that last year the Fundraising Regulator rejected 40% of new non-charity applicants.

4. Licensing DBS and accreditation

The report discusses DBS checks for all fundraisers, and concludes that they are not appropriate in every circumstance. However, charities are entitled and encouraged to insist on DBS checks to mitigate risks to vulnerable people and children and the charity’s reputation in fundraising.

2. Writing contracts and managing them

      a. Contract requirements

    The report sets out the Charities Act 1992 professional fundraiser contract requirements:

• Any standards or schemes the participants are part of
• How the agency will protect against intrusive or pushy behaviour
• How the charity will monitor the contract

2. Sub-contracting

Where subcontracting is not permitted this should be set out in the contract. Where it is, the terms of the original contract should be mirrored at each stage of the chain. Every new sub-contracting partnership requires written permission of everyone in the chain. Charities are entitled and encouraged to contact the face-to-face fundraisers to monitor performance and compliance.

3. Responsibilities of each organisation

The primary contractors (the charity and primary agency) must have oversight and responsibility for due diligence and contract management, although every subcontracted party involved in a fundraising campaign shares responsibility in line with their contract.

Controls should be put in place to ensure that any subcontracted services are provided to a standard which is no less than that agreed in the primary contract (and that suitable remedies are available if this contractual term is breached).

4. Exit clauses and penalties

Although not in the regulator’s remit, it recommends contracts provide for termination for good reason. If collaboration and attempts to reconcile differences fail then termination is an ‘appropriate part of … ongoing contract management’.

3. Training and standards

Training is essential, must cover the code and must be a term of every subcontract. It must not be sacrificed for commercial considerations. Charities should review all fundraising scripts and materials to ensure they align with standards, laws and the charity’s values. Charities should have oversight of training at every level of subcontracting.

4. Monitoring

There are myriad ways of monitoring performance – the Regulator reminds us of the requirement in the Code to ‘make all reasonable efforts to monitor whether the third-party fundraisers or commercial partners are keeping to the agreement you have with them’. It sets out practical suggestions, such as:

• having a lead person for monitoring;
• clear reporting requirements against agreed targets;
• authorising materials for training; and
• regular (for example) call monitoring, secret shopping or shadowing.

5. Complaints

A complaints procedure should be agreed in the primary contract and subsquent contracts. Responses should be timely and effective. If serious you may need to self-report to the Fundraising Regulator.

Next steps

The Fundraising Regulator will work with CIoF to produce new or updated guidance about due diligence, training, monitoring, contractual standards and how accountability applies across the subcontracting chain.

Charities with an income over £1 million must cover aspects of their fundraising in their annual report – including details of subcontracted fundraising. The Regulator considers it good practice for charities with lower incomes to also include these details and has produced guidance to help.