Ambitious UK Regulator Addresses Donor Rights in Digital Fundraising

October 4, 2017; Civil Society

The infrastructure in the UK charged with regulating fundraising is far more sensitive to the nuances of possible abuse of donor interests than any related body in the United States. But ethical fundraisers in the United States can use these questions as a guide to judge their own practices.

The Charity Commission regulates 180,000 charities in England and Wales. The Fundraising Regulator was created to collaborate with the Charity Commission and UK’s nonprofit sector in general, not without its own growing pains, to help restore public trust following the public outcry over aggressive fundraising practices in 2015, such as in this story.

They have been busy. As noted by NPQ, they have fined organizations for deploying standard-for-the-United States fundraising practices without documenting donor consent, including donor list sharing, wealth screening, data matching, and tele-matching. This new initiative is also responsible for investigating troublesome fundraising practices and establishing industry standards, which have been set forth incrementally in its “Code of Fundraising Practice.” The Code addresses such diverse aspects of fundraising as working with volunteers, children, and third parties; communications methods and techniques, including direct marketing, reciprocal mailing, the telephone, and digital media; working with trusts, major donors, and corporate partnerships; payment of fundraisers; and the handling of donations—and that’s just the tip of the iceberg shown in the table of contents.

At the end of September, the Fundraising Regulator announced it would be expanding its review to include digital fundraising platform practices in its Code of Fundraising Practice. An online giving summit was convened with senior representatives from 14 major giving platforms—among them Just Giving, GoFundMe, Virgin Money Giving, BT MyDonate, PayPal Giving Fund, Total Giving, Charity Choice, Givey, Everyclick, Local Giving, The Big Give, Wonderful, The Good Exchange, and Blackbaud’s everydayhero. Other providers are invited to participate in future talks.

The goal is to agree on shared principles to increase public understanding and transparency about practices. The Charity Commission and the Fundraising Regulator will report to the Minister for Civil Society on the adequacy of the regulatory framework.

Instead of chilling news reports about donors being mercilessly hounded and exploited in the mail and on the street, this review followed parliamentarians expressing their concern about possible fraudulent activity and transparency issues that arise when giving happens swiftly online in a torrent of anguish, such as following the terrorist attacks in Manchester and London and the Grenfell Tower fire. The online giving platform leaders at this summit discussed issues familiar to the global nonprofit sector, such as the pace at which beneficiary charities can effectively and measurably distribute funds in response to “high-profile” humanitarian emergencies.

It’s one thing for charity professionals to digest and adhere to the growing list of rules, but what about the feasibility of crowdfunding sites properly informing individuals new to fundraising about the consequences of exaggerating or worse on their personal giving pages that they create in minutes? The crowdfunding platforms also addressed the need to help users and donors clearly understand the charges and fees involved across different platforms.

The Code of Fundraising Practices comprises many hundreds of rules. Some of them are legal requirements. Here is a very brief, cherry-picked sample:

• Organizations MUST NOT exaggerate facts relating to the potential beneficiary.

• Organizations MUST NOT take advantage of mistakes made by the donor.

• Fundraisers MUST take all reasonable steps to treat a donor fairly, enabling them to make an informed decision about any donation. This MUST include taking into account the needs of any potential donor who may be in a vulnerable circumstance or require additional care and support to make an informed decision.

The boldface type is intentional; in the code, those “musts” and “must nots” are considered to be “a professional standard to be met” by the regulator. One rule in particular could make online fundraising problematic: “Organizations MUST NOT engage in fundraising which is an unreasonable intrusion on a person’s privacy.”

A conspicuous online fundraising vendor missing at this recent summit was Facebook. Facebook is possibly the most fined online platform for violating privacy regulations. Facebook is continually expanding its fundraising tools. Facebook users are able to raise money for personal crises as well as charitable campaigns. In 2013, Facebook first offered US nonprofits the Donate button, and in 2015, Facebook invited nonprofits to set up campaign pages and later enabled individuals to collect funds on behalf of nonprofit organizations. Facebook just announced it is bringing its suite of fundraising tools to the UK and Europe.

Is the Fundraising Regulator up to holding Facebook accountable? Should UK charities be cautioned to stay away from using Facebook fundraising tools? Here is just one among many warnings from those who know the details.

“I am horrified but absolutely not surprised by this amount of data,” said Olivier Keyes, a data scientist at the University of Washington. “Every app you use regularly on your phone owns the same [kinds of information]. Facebook has thousands of pages about you!”

When you are fundraising on Facebook, there’s a risk the information will be shared. The UK is reasonably taking into account technological changes in fundraising and how that affects the ethics of what we do. It’s high time we did ourselves.—Jim Schaffer