Why Devon Air Ambulance has not paid the Fundraising Regulator Levy
By Heléna Holt, Chief Executive, Devon Air Ambulance
On 1st November 2016, we received an email from the newly formed Fundraising Regulator asking us to pay a voluntary levy in order to fund their operating costs. The email made it clear that there is currently no legal requirement to pay this levy although it explained that the government “took reserve powers in the Charities (Protection and Social Investment) Act 2016 to enforce payment of the levy should that become necessary.”
On 10th November 2016 we received an invoice for £1500 for this voluntary levy. After careful consideration, we have decided that, for the timebeing at least, we will not pay £1500 of our donors’ money on this levy for a number of reasons which we are sharing below. The Trustees will monitor developments and, should this become a legal requirement in future, will of course pay what is required. We would be very interested to hear our supporters’ views on this issue to assist with our ongoing deliberations as ultimately we believe our primary accountability is to our community.
Devon Air Ambulance is a complex organisation and as such is already heavily regulated by several bodies, some of which are legal requirements and some we choose to subscribe to. Each has their own requirements, which we must keep abreast of and comply with, and varying levels of audit and reporting. This inevitably adds to our support costs but in most cases we recognise that not only is such regulation necessary it is also a good thing as it helps us achieve the best possible standards in all we do. We do however expect it to be proportionate, reasonable and represent good value for money!
Regulators We Must Comply With
- As a Commercial Air Operator we are regulated by the Civil Aviation Authority. This involves a high level of regular audit and reporting and in 2016 cost £11,560. This might seem expensive but is not only a requirement but good value for money for the benefit we gain from their significant oversight of flight safety, airworthiness and the continually changing regulatory framework for small complex operations like ours. The expertise and guidance they provide supports us in running the safest possible helicopter emergency service that we can for patients, crew and the public.
- As a charity, we are regulated by the Charity Commission to which we must submit our audited accounts and make an annual return. We must comply with Charity legislation and we choose to comply with the many good practice guidelines on all aspects of our charitable activity including fundraising. We produce an annual report and accounts in full compliance with the Statement of Recommended Practice for charity accounting that is freely available to the public. This is currently paid for by central government in recognition of the enormous public benefit that charities provide.
- As a limited company, we are also regulated by Companies House to which we must submit our audited accounts, make an annual return and notify them of any changes to membership of our board. This costs just £15 per year.
- As a Membership Lottery Operator we are regulated by the Gambling Commission to which we must make an annual return. This costs £1,458 and is a legal requirement of running a society lottery.
- Our handling of personal data is regulated by the Information Commissioner’s Office (ICO) to which we must make an annual return and costs just £35 a year. In return we get access to expert advice to assist us in ensuring we comply with the law and protect the charity and our supporters’ data.
Other Bodies We Choose to Comply With
- As a member of the Association of Air Ambulances (AAA) and of the Institute of Fundraising (IOF), we have undertaken to comply with The Code of Fundraising Practice, as developed by the IOF and as adopted by the new Regulator. We choose to pay £3,000 to be a member of the AAA as this gives us access to much greater benefits in terms of sharing best practice on everything from clinical care and operations to fundraising, plus, we receive significantly more than this in funds from the AAACharity. Until last year, this also included membership of the Fundraising Standards Board, saving us £440 per year.
- As a retailer, we are bound by Trading Standards and we are also members of the Charity Retail Association (CRA). Again, we choose to be members of the CRA because it gives us access to a wide range of resources, training, research, advice and guidance on best practice and this costs £941 per year.
- Our advertising and communications with supporters are regulated by the Advertising Standards Authority (ASA). Although not a statutory body, they can investigate complaints about advertising materials and impose sanctions and publish their findings so it is in our interests to comply with their guidance as a breach could have a damaging effect on our reputation. This is funded by a small charge added to the cost of producing advertising materials so organisations pay according to their use and therefore represents excellent value for money.
Value for Donors’ Money
Prior to the establishment of the Fundraising Regulator, we were registered with the Fundraising Standards Board. Membership of this was considerably cheaper at £440 and, in our case, was free as a benefit of our membership of the AAA.
The main purpose of the Regulator is to receive and investigate complaints about fundraising, a role which the ASA already substantially performs.
A blog by Professor Adrian Sargeant of Plymouth University compares the cost of the Fundraising Regulator to the cost of the ASA. Based on the Regulator’s operating budget of £2.5m per year and its own reported estimate of the likely number of complaints being 800, the cost of each complaint handled by the Regulator will be £3,125. The cost of each complaint handled by the ASA, which already regulates charity direct marketing materials, is £263.
For all the complaints received it is expected that only 1/16th will require investigation. Splitting the operating costs by 50 investigations gives a figure of £50,000 per investigation compared to the ASAs cost of just £1,456 per investigation. We must question how this represents value for money.
Commitment to Best Practice in Fundraising
The formation of the Fundraising Regulator was the Government’s response to some high-profile cases of poor fundraising practice by a small number of very large charities. These are practices that Devon Air Ambulance does not use, such as Direct Mail campaigns, door to door fundraising, telephone canvassing by commercial fundraising firms, data sharing and trading, ‘chugging’, wealth screening etc.
The Fundraising Regulator will list organisations that pay on their website as it believes that failure to pay the voluntary levy will be seen as a lack of commitment to good practice in fundraising. We hope our supporters will judge us on our conduct first and foremost. We have always been committed to straightforward community fundraising based on open and honest communication only with people who have given us permission to contact them and that respects our supporters, donors and volunteers.
As stated above, we are already committed to upholding the IOF’s The Code of Fundraising Practice. Through our membership of AAA we must comply with this and our Fundraising Director is a member of the IOF to ensure that we keep abreast of developments in this area.
We have a robust complaints system in place for all aspects of our operation, from complaints about our shops to fundraising to aircraft operations. We are only as good as our reputation. We live by our Supporter Promise:
- We don’t share or sell any of our supporters’ data
- We treat our supporters as they wish to be treated
- The only mail we send out is our Helipad magazine up to four times a year to keep our supporters up to date with our activities and local interest
- We send monthly enewsletters – only to supporters who have asked to receive them
- We don’t authorise anyone to go door to door on our behalf
- The only representatives of the Charity who may ask for your personal information are our lottery canvassers but only if you choose to join
- We do not employ third party companies to ring our supporters asking for more or to cold call
- We do not pay commission to anyone collecting our boxes or cheques on our behalf
Opting in to Communications
Another of the tasks of the Fundraising Regulator is to set up the Fundraising Preference Service. This will give everyone access to a website portal to opt out of receiving direct marketing communication (by email, text, phone or addressed mail) from specific charities. It will not stop unaddressed mail or administrative communications. According to the Regulator’s website, it has not yet been developed. There is no indication when it will come into force.
As of 25 May 2018, however, the new General Data Protection Regulation, regulated by the ICO, will require that all organisations, including charities, must have explicit permission from people they hold data on to hold that data and for what they can do with it. This means that, rather than asking people to opt out of receiving communications, organisations must ask them to opt in and should not contact them unless they have done so. This will make the Fundraising Preference Service redundant before it gets going.
We are already reviewing all our permission requests to ensure these are all Opt In as opposed to Opt Out ahead of the deadline.
Until such time as the levy is made a legal requirement we do not believe it is going to provide our donors or beneficiaries with value for money.
We would like to hear from you if you have a view on this issue. Please send your comments to our CEO Heléna Holt via email.