A watchdog says charities must make changes in the wake of a WalesOnline investigation that exposed exploitation in the fundraising industry. The Fundraising Regulator carried out a major inquiry after we went undercover at an exploitative door-to-door collections office.
In a 36-page report, the regulator has now said charity reps should be paid a "living wage" and that there must be better oversight. It follows the watchdog's first market inquiry which was launched after what it described as our "alarming" undercover report from the office of Vantage and Solution Cardiff. The watchdog spoke to 78 charities and agencies for the inquiry into face-to-face fundraising, which has now led to a report that tells charities to implement various safeguards.
During our investigation, we went undercover at a direct sales office in Cardiff and our hidden camera revealed door-to-door reps were trained to "trick" people into charity payments. And in January we broke the story of a second Cardiff office, BMGroup, which used manipulative tactics to get donations and put reps through humiliating forfeits if they missed targets. Both offices lied to reps that they would be paid a salary and heavily controlled their lives. The offices closed down after our reporting but were part of wider networks that remain active.
READ NEXT: The swanky new-build estate that turned into an 'unfinished nightmare'
DON'T MISS: Man's anger after spending £15,000 on 'massage' number plate
The watchdog's report tells charities to monitor subcontracted firms more closely. The report says charities and agencies also "need to be satisfied" that the payment model "does not lead to bad practice". It adds that reps should receive a living wage for their work, after we revealed evidence of commission-only models motivating reps to use pressure-selling tactics. And, as for training, the regulator says charities should "at the very least reserve the right" to be in the room when subcontracted firms receive training on their campaigns.
Jim Tebbett, who led the inquiry, told us: "There is bad practice which has been exposed by WalesOnline, but face-to-face fundraising is a method that can be done well and it can be done safely." He added that it is "crucial" for charities to have "a clear line of sight" to those who are fundraising in their name. The report says charities must have "explicit discussions" about whether subcontracting will be permitted in the contract with the main agency they contract with, and expressly prohibited if not. If subcontracting is permitted, charities and agencies must ensure the standards are no less than what was agreed in the primary contract.
If the watchdog becomes aware of failings, it can ask for improvements within a certain timescale, and can release a public report about the case. If the timescale for improvements is breached, the regulator can refer the case to the Charity Commission which, unlike the Fundraising Regulator, has enforcement powers such as barring people from being a charity trustee.
The Fundraising Regulator has also been consulting on whether the Code of Fundraising Practice needs to be "updated and possibly strengthened". A new draft code is set to be published early next year. The current one says commission-only payment models should only be used as a last resort. Fundraising Regulator chief executive Gerald Oppenheim told us a requirement for reps to be guaranteed a minimum wage could be considered, but he added that there are doubts over whether this would be "an enforceable requirement".
Cardiff Central MP and shadow Welsh secretary Jo Stevens said: "It's welcome that the regulator has issued new guidance aimed at tackling the Dickensian exploitation too many in Cardiff have suffered." The MP spoke out in our earlier coverage on what she thinks the UK Government should be doing to prevent similar cases, including giving more rights to "all but the genuinely self-employed". The companies exposed by WalesOnline used what Ms Stevens described as bogus self-employment loopholes to avoid paying a minimum wage.
Separately to the inquiry, the watchdog is investigating the National Deaf Children's Society and SOS Children's Villages, which were both linked to exploitation in WalesOnline's coverage. The regulator described these as "complex investigations which will take time to conclude". SOS Children's Villages has committed to no longer working with fundraising companies that are "part of a network of companies, or who share office space with other fundraising companies". NDCS said it would "act on any recommendations" made by regulators.
As a result of the inquiry, the Charity Commission has committed to updating its statutory guidance to ensure money is raised in "a responsible way". Its head of strategic policy Holly Riley said: "We welcome today’s report from the Fundraising Regulator which puts an important spotlight on the risks and issues that all trustees should be aware of when using subcontractors to fundraise on behalf of their charity."
If you would like to share your experience of working for a direct sales company, email us at conor.gogarty@walesonline.co.uk
