21 March 2019 - Article
The new Fundraising Regulator, which is due to take over from the FRSB on 7 July 2016, has published proposals on how charities and fundraising organisations will register with it and the financial contribution they will be asked to make. The Fundraising Regulator’s preferred option is for all charities who spend more than £100,000 a year on generating funds from the public (approximately 2,000 charities) to contribute towards the levy.
The Fundraising Regulator has considered the following principles when putting together its proposals:
- fairness – charities who spend the most on generating voluntary income contribute the highest rate of the levy;
- ensuring that charities within the scope of the levy are not disproportionately disadvantaged by the cost or requirements of being registered;
- ensuring that a small number of charities are not seen to influence the Fundraising Regulator due to the amount which they contribute;
- comparative to the membership fees imposed by the FRSB and PFRA; and
- simple and straightforward to minimise any overheads.
It is proposed that charities who spend more than £100,000 a year generating voluntary income will pay a staggered levy starting at £250 and rising to £10,000 for the 13 charities who spend more than £20m a year on generating voluntary income. The rate payable will be fixed from 1 August 2016 to 31 March 2019. The Fundraising Regulator considers that this will provide certainty and will discourage organisations from trying to allocate their fundraising expenditure elsewhere.
The Fundraising Regulator proposes that a small number of exempt charities (150) that raise voluntary income (such as universities in England and national museums and galleries) should also contribute to the levy at a fixed rate of £1,500. This is because they have a different accounting regime so details of their fundraising expenditure is not easily available. It is not clear how the Fundraising Regulator will determine which of the many exempt charities will be required to contribute towards the levy.
There will also be a small administrative charge for charities who are not caught by the levy and fundraising agencies who wish to sign up to the Fundraising Regulator.
The consultation paper highlights that the Fundraising Regulator is a voluntary self-regulatory body, although notes that the Government has reserve powers to require English and Welsh charities to sign up to the Fundraising Regulator or contribute towards the levy. Discussions are still taking place in Scotland and Northern Ireland to confirm whether Scottish and Northern Irish charities will be able to join the Fundraising Regulator.
The consultation is open until 22 July and we invite all charities, particularly those who may fall within the scope of the levy or who are exempt charities, to respond to the consultation. Withers will be responding to the consultation through our membership of the Charity Law Association.
The consultation is available here.