Fundraising Levy to Impact 2000 Charities

Fundraising Levy to affect 2000 Charities

The charity sectors’ newest body will be moving forward with the Fundraising Levy: the latest duty implemented to help promote fairness and transparency of fundraising practices. Consequently, charities that spend a significant amount of money on fundraising, can expect to pay annual fees as high as £15,000, an increase of 33% from the initial proposal.
The Fundraising Regulator, the replacement body for the Fundraising Standards Board (FRSB), is enforced to maintain and set the fundraising standard in the UK. Therefore, earlier this year the regulator held a consultation to discuss how best to fund the board and carry out its objectives. With an estimated £2million to £2.5million a year needed to fund the regulator’s activity, the regulator ruled in favour of a ‘Fundraising Levy’ to be applied to enlisted charities that spend £100,000 or more of their total annual expenditure on qualifying fundraising activities.
This fundraising levy came into force on 1 September 2016, affecting approximately 2000 charities. However, with the general consensus from the consultation showing that the original contributions agreed was unjust, the board have declared that the duty will be:

  • Applied on a sliding scale: Contributions will be relative to the amount spent on fundraising.
  • Proportionate: All contributions made must be equally or as close to equally proportionate as possible. This is to ensure that none of the organisations paying the levy have a stake or influence in the Fundraising Regulator’s decision making.
Charity annual spend on generating voluntary income based on total spend Charities Annual Levy
£’s
12 Months Total Income £’s Charity spend %
£100,000-£149,999 383 150 57,450 0.10%
£150,000-£199,999 268 300 80,400 0.15%
£200,000-£499,999 677 800 541,600 0.16%
£500,000-£999,999 354 1,500 531,000 0.15%
£1m-£1,999,999 140 2,500 350,000 0.13%
£2m-£4,999,999 77 4,000 308,000 0.08%
£5m-£9,999,999 31 6,000 186,000 0.06%
£10m-£19,999,999 18 8,000 144,000 0.04%
£20m-£49,999,999 11 12,000 132,000 0.00%
Over £50m 2 15,000 30,000 0.00%
Totals 1961 2,360,450  

From the above table you can see that charities who spend between £100,000 and £149,000 can now expect to pay an annual levy of £150 to the FRSB; a saving of £100 from the initial proposal. However, the revised proposal now means that over 30 organisations will have to contribute significantly more. Those who spend over £50million on fundraising will now contribute £15,000 each year towards the cost of funding the regulator, an increase of £5000 from the initial proposal. The implementation of the bands above will reassure that all charities will contribute towards the levy an amount that is considered ‘fair’ in proportion to their size.
It is important to note that a small number of exempt charities have registered to pay the levy, including schools, museums and galleries. The regulator has implemented a flat fee of £1,500 per annum for exempt charities that may not necessary have data on their fundraising spend. The flat-fee will only be applied if the charity:

  • Is not regulated by the Charity Commission (e.g. the organisation is headed by a university)
  • Follows a different accounting regime to the SORP
  • Has similar public-facing fundraising objectives to other charities in the proposal

The levy will be implemented for 2 years and 8 months starting from the 1 September 2016 and reviewed after three years. Those charities who fail to pay will be named and shamed by the regulator.
Head of policy at the regulator Gerald Oppenheim, stated: “The Fundraising Regulator’s priority is to build and sustain public confidence in the sector. Charities can help achieve this by registering with the regulator and by agreeing to the fair and proportionate levy.”
To find out more information or to register for the levy, please go to https://www.fundraisingregulator.org.uk/information-registration-for-fundraisers/discussion-paper-registration-levy/.
Source:
https://www.fundraisingregulator.org.uk/wp-content/uploads/2016/06/Registration-and-Levy-discussion-paper-final-version.pdf