Self-regulation of fundraising went down the tubes this week in the U.K., and the nonprofit sector has no one to blame but itself.

A review commissioned by the government following a media exposé of pressurized fundraising tactics used by some charities (see Agitator here, and here) concluded that the self-regulatory Fundraising Standards Board (FRSB) had been “ineffective in regulating fundraising” and had “lost the confidence of the public and charities”.

Replacing the self-regulatory FRSB will be a new body tentatively but candidly titled ‘The Fundraising Regulator’. This new government-sanctioned body will have the power to set and enforce standards including the shutting down of nonprofits that abuse the rules. The report specifically notes that these new rules should not be set by fundraisers themselves via the Institute of Fundraising, the trade association of fundraisers.

The report also proposes a ‘Fundraising Preference Service’ that will give donors the opportunity to opt out of fundraising requests from multiple charities without having to contact each of them separately.

You can download the report prepared by the commission headed by Sir Stuart Etherington and titled Regulating Fundraising for the Future: Trust in charities, confidence in fundraising here. Or read a summary in U.K Fundraising here.

In a nutshell, the report calls for substantial change with the ultimate and laudable ambition being “that charities view and conduct fundraising not simply as a way to raise money, but most importantly as a conduit between their donors and the cause they wish to support.”

No question that the change that’s coming will be a bitter pill for many charities to swallow. Especially the large charities whose aggressively bad habits triggered all this.

  In fact, I suspect that it will take some charities years to ‘recover’ in terms of income lost by being forced to live in a world where the donor is in control. Forced to abandon their ‘donors-be-damned’ mindsets.

Hallelujah!

My sense is that in the long run this wake up call will be of enormous benefit to the charitable sector in the U.K. I called Ken Burnett to get his take on this shakeup and he noted enthusiastically that “this is one of the best things to have happened to U.K. fundraising in years. It’s a wakeup call for the whole sector.”

[The BBC lost no time covering release of the Report, and you can see Ken’s comments and those of some donors in this interview with Victoria Derbyshire on BBC2.]

While I ‘m opposed to any kind of government intervention in fundraising short of dealing with fraud, this move in the U.K. has the redeeming feature of forcing the business-as-usual crowd to learn new and better ways of dealing with donors. Perhaps those incapable or unwilling to learn will either retire, quit or be fired.

(Although the First Amendment to the U.S. Constitution insulates most U.S. nonprofits from their own horrific practices toward donors, the powerful force of rampant donor attrition should itself serve as a powerful alarm in the States.)

So, whether you’re a U.K. charity or one who conducts business elsewhere, the Etherington Report is worth careful reading and heeding.

There are lots of sensible, donor-centered suggestions outlined in the report. One of them is the creation of a ‘Commission on the Donor Experience’ with an emphasis on strengthening relationships between fundraising organisations and donors.

Agitator readers will be familiar with the ideas behind this Commission, which we covered earlier this summer in the post Playing the Fundraising Blame Game in the U.K. 

There’s no question in my mind that the experience of the donor is the spear point of change. If anything is going to change organization-centric thinking it’s a constant stream of examples (and an occasional media tsunami) of the problems donors have when interacting with nonprofits.

What has happened in the U.K. — and is also happening in the U.S. and elsewhere — is that too many nonprofits have become more and more distant from their donors. They have resorted to technology, and a quiver of impersonally applied techniques, to unintentionally build a wall of separation.

The bricks in this wall of separation are often mistakenly called ‘touchpoints’. Yet somewhere along the line too many fundraisers have forgotten that ‘touchpoints’ should be about humans touching or reaching out to one another. Instead they have come to view touchpoints and the building of human relationships as a cost, not an opportunity.

Fortunately, at least the fundraisers in the U.K. are about to get a second chance. A new opportunity.

Roger