Could Scotland lead the way in fundraising regulation?

There is a genuine opportunity for Scotland to become a world leader in fundraising regulation.

The review of fundraising in England and Wales that was conducted by NCVO has made up its mind what needs to be changed and is now gathering various bodies to implement its plan. The situation in Scotland is different.

SCVO’s sister review is a lot less prescriptive and more amenable to the charity sector co-creating a new regulatory regime rather than imposing one on it. For example, whereas NCVO is establishing a working party to decide how to implement its Fundraising Preference Service – a hobbyhorse of minister for civil society Rob Wilson – SCVO is discussing at its summit whether such a service is needed (the review didn’t propose it).

Scotland is in a strong position to put in place a new system of fundraising regulation that fills a genuine need for change rather than one that just responds to political and media pressure.

But it will require a shift in SCVO’s current thinking.

SCVO’s review concludes with a call to action that signals its philosophical bent on the future direction for fundraising regulation:

“It is necessary to look at a ‘rights-based’ approach, where the rights of the public and donors become central, instead of peripheral, to fundraising.”

Notwithstanding the fact that the rights, needs and wants of donors are already central to many fundraisers – it’s literally what ‘donorcentric’ fundraising is all about ­– SCVO’s approach is actually not all that radical. It’s the standard consumer protection approach to fundraising regulation that the Fundraising Standards Board has adopted since its inception in 2006.

Scotland, we are looking to you

The problem with this ‘consumer protection’ approach is that donors are not central to what a charity does – beneficiaries are; charities don’t exist in order to provide a service to their donors: they exist to provide a service to their beneficiaries.

Fundraisers enter the picture by asking the public to help fund those services to beneficiaries. So whereas commercial marketers persuade customers to buy something that benefits the customer, and thus benefits the marketers’ company, fundraisers do something different. They persuade donors to give money to benefit someone else entirely – the beneficiary.

There is no product or service a donor ‘buys’ from a charity that requires the same type of protective regulation that is needed if you buy a pair of shoes online. And yet this is the type of regulation that the FRSB lazily put in place and what the NCVO in England and Wales appears to want to strengthen.

Instead we need an approach that is far more sophisticated. If you make the donor ‘central’ to the regulation of fundraising, then you have to push the beneficiary to the periphery (‘beneficiary’ isn’t mentioned once in SCVO’s review).

The opportunity in Scotland is to make both donors and beneficiaries central to fundraising regulation. Beneficiaries were invisible to the FRSB, which never considered they had any relevance to its mission to protect the public from ‘aggressive’ fundraising.

But putting both key stakeholders at the centre leads to an acknowledgement that the duties that fundraisers owe to their beneficiaries (raise as much money for services as they can) might conflict with what their donors desire (asked less, not asked in certain ways, at certain times, etc).

Ethical fundraising should seek to balance the duty of fundraisers to ask for support with the rights of donors not to be subjected to undue pressure to give. This requires more sophisticated regulation than simply restricting the things the public don’t like.

It doesn’t look as if such a regulatory balancing act is going to be implemented in England and Wales. It doesn’t yet exist anywhere else in the world. Scotland, we are looking to you.

Ian MacQuillin is director of Rogare, the Fundraising Think Tank, at Plymouth University’s Centre for Sustainable Philanthropy.He will be speaking at SCVO's forthcoming summit on the future of fundraising regulation in Scotland.