Two new amendments to the charities bill will be proposed that would enable the government to introduce statutory regulation for fundraising if necessary and force charities to join the new fundraising regulator.
Minister for civil society Rob Wilson announced the proposals as he gave evidence to the Public Administration and Constitutional Affairs select committee, which is conducting an inquiry into fundraising regulation.
He has proposed that the clauses be added to the Charities (Protection and Social Investment) Bill, which is currently making its way through parliament.
These would consist of a reserve power enabling the government to introduce statutory regulation if the recommendations made in the review did not work, he said, and another reserve power that would mandate organisations to join the new fundraising regulator, currently being established.
The review follows a series of critical articles in national newspapers, which prompted Wilson to ask Sir Stuart Etherington, chief executive of NCVO, to conduct a review of regulation.
In response to Etherington’s review, the government announced last month that large charities, likely to be defined as those that spend £100,000 or more a year on public fundraising, “could be forced to sign up to a new fundraising watchdog”.
The new regulator will have more substantial powers, including greater support from the Charity Commission, a Fundraising Preference Service which would allow a donor to opt out of all charity communications, and a requirement that donors opt in to all future charity communications.
“We’re making very good progress on implementing the recommendations,” Wilson told the committee. “We hope to have a chair in place imminently.”
He said he believed this was “the last chance” for self-regulation, and that statutory regulation would have to be introduced if it failed.
The committee was highly critical of the fact that no one in the charity sector appeared to be aware of systemic poor practice prior to the Daily Mail investigations.
“Everyone who has come in front of this committee has said they didn’t know what was going on,” said Bernard Jenkin, Conservative MP for Harwich and chair of the committee.
Wilson said he had already been working on changes to fundraising regulation before the crisis broke, but conceded he had not known about the scale of abuse.
William Shawcross, chair of the Charity Commission, cautioned against state regulation of fundraising, saying that if charities were over-regulated they would just become another arm of the state.
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