Growing numbers of people are being misled and pressured into donating cash to companies they mistakenly believe are charities, a watchdog has warned.
“Aggressive” tactics by groups that collect money on high streets and outside rail stations “threaten to bring charitable fundraising into disrepute”, according to the Fundraising Regulator.
The organisations causing concern are private businesses known as community interest companies (CICs), which are governed more loosely than charities. Some are feared to be using good causes as fronts to make money.
The Fundraising Regulator’s latest report reveals more than 10 per cent of complaints it receives now relate to CICs.
These include “negative fundraiser behaviour, pressure to donate, [lacking] licences and permissions, and misleading fundraising”, it said.
Gerald Oppenheim, CEO of the Fundraising Regulator, says some CICs apply ‘undue pressure’ on people to donate (Photo: Fundraising Regulator/YouTube)Tactics used by fundraisers include “obstructing people’s paths or shopfronts to talk, following people, approaching people sat down, soliciting donations, using pressurised fundraising techniques, and using excessive persistence when told ‘no’”.
Some fail to display ID, meaning the public finds it “difficult to distinguish” between CICs and charities, it said.
In November The i Paper revealed that We R Blighty, a CIC supporting homeless military veterans, is under investigation by Kent Police over suspected “financial irregularities”. The Fundraising Regulator is also looking into claims of aggressive behaviour by its street fundraisers.
We R Blighty denies any wrongdoing, blaming unclear rules that are badly enforced. There is no suggestion of We R Blighty failing to deliver on its pledges of support for homeless veterans.
We R Blighty fundraisers collect cash to help buy boats like this one, which have been used as accommodation for homeless military veterans (Photos: Facebook)CICs causing concerns
Inside Success Union, a CIC based in east London, pleaded guilty to five offences of collecting without licences at Manchester magistrates’ court in 2023. But with the fines and penalties imposed on it totalling just £1,481, some feel stronger punishments are needed to deter such behaviour. An investigation by the Mail on Sunday disclosed that Inside Success Union had raised £3.1m but spent almost all of this on salaries and commission. The Fundraising Regulator found last year that it had pressured donors and wrongly claimed to be a charity. James Anderson, a plumber from Burnley who ran a CIC called Depher, had his British Citizen Award rescinded last year, after the BBC alleged that he had faked stories about helping people. He denied some of the claims but admitted: “I’ve made mistakes.” Last year, a CIC named The World Suicide Prevention Project was ordered by Scottish regulators to stop “misrepresenting” itself as a charity of the same name, which had been set up by the same person. The founder said he wasn’t trying to hide anything and closed the charity citing health reasons. James Anderson said he was ‘really sorry and I will make amends’ after allegations were reported about his CIC, Depher (Photo: PA Wire)The Fundraising Regulator independently monitors how charities, CICs and other organisations collect donations. However, it has no oversight on how they spend money.
Its CEO, Gerald Oppenheim, acknowledged that CICs make “many contributions to British society”, but noted a “worrying trend” of their funds coming “largely from charitable-style public fundraising”.
Many people are “understandably mistaking CIC fundraisers often seen at train stations and town centres for charity fundraisers”, he said.
“CICs are responsible for a significant proportion of instances when people feel an undue pressure, with some cases even crossing into intimidation.”
Complaints about CICs have been made by the police and local authorities, as well as members of the public and charity fundraisers. They have nearly doubled year on year from 29 complaints to 54, in the 12 months up to March 2024.
Leading figures in the charity sector fear that scrutiny of these companies is not strong enough.
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Read MoreThe Regulator of CICs – a separate, part-time organisation of just seven staff – has previously been tasked with carrying out “light-touch” regulation with a “minimum of interference”.
This has primarily involved maintaining a register of CICs and processing applications for new ones to be formed, rather than checking how more than 30,000 existing ones are behaving.
It will be now merged into Companies House “when parliamentary time allows”, a spokesperson confirmed. It will continue with “business as usual” until then.
Although it has the power to investigate complaints, it believed to have done this only once in its 20-year history.
Louise Smyth, regulator of Community Interest Companies, said her team and the Fundraising Regulator “have worked closely to address emerging issues that have arisen in relation to community interest companies and fundraising”.
She added: “I remain committed to ensuring CICs continue to meet the requirements of the CIC legislation and encourage them to comply with the requirements and legislation of other regulators in all their activities.”
The Treasury was approached for comment.
@robhastings.bsky.social
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