A legal opinion on fundraising self-regulation

At nfpSynergy we have been very interested in the effect of the new fundraising regulation on charities.

At nfpSynergy we have been very interested in the effect of the new fundraising regulation on charities.

Our research shows it is likely to be popular with the public, but every conversation we have had with charities shows a deep level of concern about the impact of the Fundraising Preference Service.

One aspect of the new regulation about which there has been little discussion is the legal dimension. Our understanding is that trustees have to make decisions that are first and foremost good for the charity they are trustees of: their fiduciary duty.

Yet for charity self-regulation to work, charities have to behave in a way which is good for the sector as a whole, even if this may be bad for their own charity.

Because the decision for trustees is so important, we think it is vital that the legal issues are clear. To our surprise we couldn’t find any legal opinion on these issues. So we decided to commission one from law firm Stone King.

We asked two questions. Firstly, is joining the regulatory framework voluntary? Secondly, what are the implications for trustees’ fiduciary duties in joining such a scheme?

The full Stone King report can be downloaded at the side of this article and their summary release here. We haven’t edited what they have to say, and we think it’s a vital contribution to the development of self-regulation.

Their work is fascinating, compelling, illuminating and requires every trustee to do some hard thinking. We neither agree with, nor understand all of it, which only services to emphasise the complexity of the issue!

Our overriding conclusion is that every trustee board will need to think very carefully about joining any scheme (fundraising or otherwise), which may benefit the wider sector but which nonetheless runs a risk of making it harder for a charity to achieve its own objectives.

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Stone King fundraising regulation legal opinion report

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