Trustees must not leave fundraising up to the fundraisers

There was much discussion and dissection in 2016 of Scotland’s new system of self-regulation for charity fundraising, and there is no need to explain it further on these pages. However, one aspect deserves further coverage. Discussions about fundraising often portray it as self-contained, as somehow discrete from charities’ other activities. This is understandable, but, when it comes to charity governance, unfortunate. In the past, some trustees paid little heed to their charities’ fundraising approaches as long as the money came in. This state of affairs has improved greatly, partly as a result of the poor publicity around some charities’ practices. Yet there is still some way to go. Good governance requires trustees to view fundraising as integral to their charity’s operations and reputation, and engage fully with everything that is done to raise funds. This does not mean trustees have to take on fundraising responsibilities themselves. They don’t suddenly have to come up with creative ideas, or approve or veto each proposal (though in smaller charities, they may do this in practice). But they do need to recognise that scrutiny of their charity’s fundraising strategies, controls and practices is at the heart of their governance role.

Trustees and charity managers need to scrutinise the reputational risks around their charity’s fundraising practices

The first level of scrutiny relates to the legal requirements around fundraising – from running raffles or lotteries, to meeting data protection regulations, to complying with relevant health and safety requirements at events. But that’s not all. Trustees and charity managers also need to scrutinise the reputational risks around their charity’s fundraising practices. Given that these are often the most visible elements of what a charity does, they can be crucial in shaping the charity’s image and brand, and by extension, its sustainability. This means that trustees need to know how and where funds are raised; whether their practices comply with ethical standards as well as legislation; and how robust is their system for dealing with fundraising complaints. Or put another way, trustees should be able to answer questions such as:

• Which fundraising methods does your charity use?
• Who raises funds for your charity – staff, third parties, volunteers – and what training and agreements are in place to make sure they meet legal and ethical standards?
• Are there systems and controls in place to ensure your fundraising culture, methods and complaints procedures are robust?
• How does the charity deal with and monitor fundraising complaints?
• Could any of your current or previous fundraising activities create operational or reputational risks, and how are these risks managed?
• Are funds raised being used effectively, and for the purposes they were raised for?
• Does the charity’s approach to fundraising reflect its values?
• Is the current fundraising approach sustainable, or may new approaches be needed?

What should be noticeable from this list – which is not exhaustive – is its thematic similarity with other governance checklists. With fundraising, trustees need to be asking about systems, controls, complaints procedures and sustainability, just as they do with other governance aspects from constitutional issues to management of staff and volunteers. Far from being disconnected from these aspects, fundraising is interrelated with them. The launch of Scotland’s new system of fundraising self-regulation will encourage trustees to ask such questions, and that is very welcome. Some trustees will be on top of it already; others may need guidance on what to ask or what to do if the answers are not reassuring. And for some charities the fundraising changes will be a catalyst for realising that they need advice or training on better governance all round. Ideally, the new self-regulation systems will take news coverage of fundraising back to the way it used to be: stories about funds raised and targets reached, rather than fundraising practices and malpractices. Trustees and good governance have a big role to play here. Alastair Keatinge is a partner and head of charities at Lindsays.