Another levy on the HE sector?

 

Another levy on the HE sector?

Following the implementation of the apprenticeship levy on those universities with a paybill of over £3million, the Charities Act 2016 now proposes a levy to provide for the operation of a Fundraising Regulator.

March 16th 2016 saw a new Charities (Protection and Social Investment) Act receive Royal Assent. As yet however, the majority of the Act is not in force and no subsequent regulations have been made under it.

The Act had an interesting passage through Parliament, facing vociferous opposition and a number of proposed amendments, some of which were adopted. Criticism of the Bill included the inclusion of new grounds for disqualification of trustees and the proposed levy on charities to fund the set-up and running of a new regulator, the Fundraising Regulator.

The impetus for the Act partly came from the publication of the Etherington Report “Regulating Fundraising for the Future” in September 2015. Prior to the commission of the Report the issue of charity fundraising had increasingly been the subject of public debate, particularly following the reporting in the press of the somewhat unsavoury methods of some fundraisers. The revelations that members of the public, including vulnerable people, had been subject to what could be considered undue pressure led to the belief that there was a crisis of public confidence in charities. It was widely believed action had to be taken to preserve public trust in the sector, particularly in relation to fundraising methods.

The Report made a number of recommendations, including that the two current voluntary fundraising regulatory bodies, The Institute for Fundraising and Public Fundraising Association, should be merged.

The Report also supported an amendment to the Act as it progressed through Parliament; requiring charities to make a statement in their Annual Report indicating what the charity has done to protect vulnerable people and the general public from undue influence during fundraising. This suggested amendment was adopted and s13 of the new Act (amending s.59 of the Charities Act 1992) requires all charities, including universities, to make an annual statement setting out their approach towards, and monitoring of, their arrangements to protect the public from intrusive and persistent fundraising activity. Universities may have to address their relationship with elderly alumni, who often leave valuable gifts in their wills, and may in some circumstances be considered vulnerable, to ensure university fundraising activities are in compliance with the Act. Compliance will almost certainly involve some amendment to internal Donations and Gifts and Fundraising Policies.

Of most interest to universities has been the insertion of a new s.64B into the Charities Act 1992. This gives the power to a Minister to issue new regulations on a variety of fundraising matters, including the power to confer additional functions to the Charity Commission regarding fundraising. Controversially the Minister also has the power to issue regulations which will require charities to ‘pay fees to a regulator…’ and require charities ‘to be registered with the regulator for the purpose of its regulation of charity fundraising’. The new Fundraising Regulator has already been set up, with the appointment of eight named members to the board. It announced recently that it will open consultation in May 2016 on the imposition of the fees, or ‘levy’, to fund the regulator.

Given the existing intensity of scrutiny from a number of regulatory and monitoring bodies, universities will no doubt be at the forefront of those charities asking for exemption from the proposed ‘levy’ regulations.


Etherington Report “Regulating Fundraising for the Future” at https://www.ncvo.org.uk/images/documents/policy_and_research/giving_and_philanthropy/fundraising-review-report-2015.pdf


Fundraising Regulator launches a consultation in May on the levy: http://www.thirdsector.co.uk/lord-grade-launch-consultation-charging-charities-fundraising-regulator/fundraising/article/1386718


The appointees to the new board of the Fundraising Regulator: http://www.civilsociety.co.uk/fundraising/news/content/21271/lord_grade_announced_membership


 
 

 

 

Hester Fairclough 

Paralegal, Education

T: 0121 214 0565

E: hester.fairclough@shma.co.uk

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