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Fundraising Self-Regulation: an Analysis and Review

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Fundraising Self-Regulation: an Analysis and Review Fundraising self- regulation: An Analysis and Review Fundraising self-regulation: An Analysis and Review Authors: Ian MacQuillin, Rogare – The Fundraising Think Tank Dr Adrian Sargeant, Director -Institute for Sustainable Philanthropy Harriet Day, Institute for Sustainable Philanthropy Published: November 2019 This report was developed as part of the ‘Sustainable Frameworks for Public Fundraising’ project, managed by the European Center for Not-for-Profit Law Stichting (ECNL). The project is made possible by the International Center for Not-for-Profit Law (ICNL) through the Civic Space Initiative This publication is wholly financed by the Government of Sweden. The Government of Sweden does not necessarily share the opinions here within expressed. The author bears the sole responsibility for the content. Copyright © 2019 by the European Center for Not-for-Profit Law Stichting. All rights reserved. 2 Contents 1.0 Introduction ..................................................................................................................... 5 2.0 Self-regulation .................................................................................................................. 8 2.1 What is self-regulation? ................................................................................................. 8 2.2 Standards ................................................................................................................... 10 2.3 Compliance and enforcement ...................................................................................... 11 2.4 Co-regulation .............................................................................................................. 14 3.0 Fundraising self-regulation ............................................................................................. 22 3.1 Drivers for self-regulation ........................................................................................... 22 3.2 When Does Regulation Occur? ..................................................................................... 25 3.3 Methods of CSO self-regulation .................................................................................... 26 3.3.1 Codes of conduct, practice or ethics ....................................................................... 27 3.3.2 Certification/accreditation schemes ...................................................................... 28 3.3.3 Information services ............................................................................................. 30 3.3.4 Working groups .................................................................................................... 30 3.3.5 Self-assessment tools ............................................................................................ 31 3.3.6 Awards ceremonies............................................................................................... 31 3.3.7 Umbrella mechanisms ........................................................................................... 31 3.3.8 Proactive or reactive compliance ........................................................................... 31 3.4 Accountability in CSO self-regulation ........................................................................... 33 3.5 CSO-SR – three theoretical perspectives ....................................................................... 36 .................................................................................................................................... 37 3.5.1 Compliance-oriented CSO-SR based on Principal-Agent Theory .............................. 37 3.5.2 Adaptive CSO-SR based on Resource Dependence Theory ....................................... 38 3.5.3 Professional CSO-SR based on Institutional Theory ................................................ 38 3.6 Effectiveness of self-regulatory regimes ....................................................................... 39 3.8 Components of an Effective Scheme ............................................................................. 43 4.0 Fundraising Code Content ............................................................................................... 47 5.0 The Role of Beneficiaries ................................................................................................. 49 6.0 Fundraising Self-Regulation in the UK.............................................................................. 54 6.1 The ‘Fundraising Crisis’ of 2015 ................................................................................... 55 6.2 Lessons from the UK’s Fundraising Crisis ..................................................................... 57 3 6.2.1 The role of the media ............................................................................................ 57 6.2.2 The role of government ......................................................................................... 58 6.2.3 Values-driven calls for change beyond what the law permits .................................. 58 6.2.4 Reinforcement of the ethos of Principal-Agent, consumer protection FR-SR ............. 59 6.2.5 Marginalisation of fundraising professionals in standards setting ........................... 60 6.2.6 Alleged confusing nature of FR-SRR ....................................................................... 61 6.2.7 Adherence to the Better Regulation Agenda ........................................................... 62 7.0 PFRA and the self-regulation of a common pool resource ................................................. 64 8.0 Conclusions and Recommendations ........................................................................... 68 Appendix 1 – Interview questions ......................................................................................... 74 A. Role of self-regulation ................................................................................................ 74 B. Professional standards .............................................................................................. 74 C. Ethics ........................................................................................................................ 75 D. Compliance and enforcement ..................................................................................... 75 E. Accountability ........................................................................................................... 75 F. Success measurement ................................................................................................ 76 G. Miscellaneous ............................................................................................................ 76 Appendix 2 – Interviewees ................................................................................................... 77 Fundraising Associations .................................................................................................. 77 Regulatory bodies ............................................................................................................. 77 Other interviewees ........................................................................................................... 78 Appendix 3 – Five principles of good regulation .................................................................... 79 Proportionality ................................................................................................................. 79 Accountability .................................................................................................................. 79 Consistency ...................................................................................................................... 79 Transparency ................................................................................................................... 80 Targeting ......................................................................................................................... 80 Appendix 4 – Timeline of UK ‘shock to system’ 2002-06 ......................................................... 81 Appendix 5 – Glossary of abbreviations frequently used in this report .................................... 82 References ........................................................................................................................... 83 4 1.0 Introduction 7. To track how self-regulation impacts the various CSOs by maturity (years The Philanthropy Centre has been engaged since registration) / scale – multi by the European Center for Not-for-Profit national, regional, local/ scope of Law Stichting to conduct research that will fundraising – mostly funded by grants support it in drafting a set of principles for or mass market methods/ governments statutory regulation and self-regulation on etc. fundraising. 8. To identify any synergies between self- The objectives for the project are: regulation and legislation: an integrated 1. To map the key principles and regulatory framework with an effective standards on fundraising covered by and appropriate balance between self-regulation. legislation and self-regulation. 2. To assess trends in self-regulation and We first conducted an extensive review of how self-regulation adapts to a the existing research and thinking around changing environment. fundraising self-regulation specifically, and the self-regulation of Civil Society 3. To identify areas where existing self- Organisations (CSOs) more generally. Very regulation has a special relevance. little scholarly attention
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