Ten things you need to know about the new Code of Fundraising Practice

After three years of consultation and engagement by the Fundraising Regulator on changes to the Code of Fundraising Practice (the ‘Code’), the new draft has now arrived. There will be an implementation period to get ready for it, with the new Code coming into force on 1 November 2025. The existing (2019) version of the Code will remain in force until that time, and any complaints will be adjudicated against the current Code rather than the new one.

Now is the time for charities and other fundraising organisations to be reviewing the new Code and thinking about what changes they may need to make to their fundraising activities to achieve compliance. We have set out the top ten things that we think organisations need to know about the new Code to help get ready.

1. The Code is shorter and more stream-lined

The new Code is 45% shorter than the current version (although still runs to 93 pages!). A lot of the existing content has been consolidated and stream-lined so that it is easier to digest. The Fundraising Regulator has stripped out sections which repeated legislation or dealt with areas where they are not the lead regulator, for example, data protection, gift aid and lottery requirements. The new Code instead sign-posts to relevant legislation and guidance from other regulators such as the ICO, HMRC and Charity Commission. This makes the Code more digestible but does mean that readers will need to cross-refer to additional rules – it is no longer all in one place.

2. There is a new ‘Principles based’ approach

The biggest change is the move to a ‘principles based’ approach, which essentially means that rather than including lots of detail about how the Code should apply, there are broader rules which can be applied to a wider range of scenarios. The Fundraising Regulator has explained that the rationale for this is to make the Code less prescriptive, more flexible and proportionate, and to help future-proof it so that the rules can be applied to new innovations (for example, AI) in fundraising without having to wait for specific regulation.

Whilst there are advantages to a principles-based approach, it means that there will be a greater need for organisations to interpret the Code and assess how the rules apply to their fundraising activity. This may make it harder to know how to comply with specific Code sections. Organisations will need to think about what is appropriate, reasonable and proportionate in the circumstances. This will very much vary depend on the size of the organisation, the types of fundraising they do and the risk profile of that activity.

3. A lot of the content has remained the same…

The structure and content of the Code has not fundamentally changed. It is still split into three parts: Part 1 covers the standards that apply to all fundraising; Part 2 relates to working with others; and Part 3 focuses on specific fundraising methods.

The core principles on which the Code is based also remain the same. All fundraising must still be: Legal, Open, Honest and Respectful.

The status of the Code has not changed. It is not legally binding. It forms part of the self-regulatory regime for fundraising and outlines what the Fundraising Regulator expects of fundraisers. It still applies to charities, social enterprises and community interest companies, professional fundraisers, commercial participators, fundraising platforms, volunteers and third-party suppliers and agencies.

4. …but there are some changes and new Code sections

There are some new Code sections that have been added:

• There is a new rule on protecting fundraisers (Code section 2.1.2). The Fundraising Regulator has listened to feedback about the adequate protection of fundraisers as well as the public and so there is now a requirement to protect fundraisers from harm and harassment whilst fundraising. This includes having processes for fundraisers to report any issues that arise e.g. to line managers or through a more formal whistleblowing policy; and taking reasonable steps to deal with any issues that are reported.
• There is also a new rule on engaging constructively with the Fundraising Regulator if it investigates a breach of the Code (2.1.3). The Code also states that you must make sure fundraising partners do the same, which may be difficult to achieve in practice.
• And there are new sections on convenience giving and unstaffed collections (7.5.1 and 7.5.2). These cover things such as static collections, tap to donate and other automated giving methods such as ‘top-up’ payment transactions. In summary, these new rules require there to be clear and accurate information about the collection e.g. names and charity numbers of the charity’s benefiting, plus details of any processing fees or payments to third party fundraisers that may be running the collection.

Some Code sections have also been quite heavily amended:

• The provisions on paying fundraisers have been stripped back (2.4). The Code no longer sets rules around commission based payments and instead includes a non-prescriptive rule about considering the approach to paying fundraisers and whether it fits with an organisation’s values. There has been a lot of discussion on this point, and it is a complex area with lots of different options that employment law advice is likely to be needed on.
• There is a new standalone section on fundraising platforms which has been expanded upon (section 8) (although there is still no clear view on whether fundraising platforms will be acting as professional fundraisers under charity law), and data protection provisions have been completely stripped out (currently in part 1 of the Code), with specific rules on direct marketing set out in section 8. It is unclear if this will be updated to take account of the extension of the soft opt-in exemption to charities under the Data (Use and Access) Bill.
• The section on prize competitions and free prize draws (section 11) no longer refers to running lotteries and raffles and now only covers prize draws and competitions. Organisations running society lotteries will need to refer to Gambling Commission rules and guidance instead.
• The legacies section provides that charities should give potential testators at least two will-writing partners to choose from when offering free will-making services (section 14.3.3). This wording is included in the explanatory notes rather than the Code rule itself, so it is unclear if this is something the Fundraising Regulator will definitely require or not.

5. There are also changes to the way in which the Code should be read and interpreted

Actual Code sections are set out in bold text. At the top of each section there is a heading which explains who the rules apply to e.g. fundraising organisations, governing bodies, third party fundraisers etc.

Some Code rules have bullet point lists of examples which set out: (i) actions that are never allowed in relation to a particular rule; (ii) actions that are always required; or (iii) ways in which the rule can be met. The Fundraising Regulator has said that these are not intended to be complete lists. If they investigate a potential breach, they may ask an organisation to explain how it met the expectations listed, or how it used a different approach to meet that rule.

There is wording in plain text which explains how a rule may be applied or flags other important legal or regulatory requirements that apply. The intention is for this explanatory text to be updated and changed more easily, if for example, there is a change in the law, rather than having to consult on changes to Code sections themselves, making the Code more agile.

There are text boxes that explain and sign-post to relevant legislation in each section as well as links to guidance from other regulators and sector bodies. At the end of the Code there is a revised Glossary of terms used.

The Fundraising Regulator has also put together a helpful ‘table of changes’ which shows the differences between the current and new Codes.

6. The Code is accompanied by three new Code Support Guides

Three new Code Support Guides have also been published which are aimed at supporting organisations to comply with the new Code. The Fundraising Regulator has stressed that it is not legal advice and is instead advisory and non-exhaustive and should be used in conjunction with other legislation and guidance. There are plans to issue more Code Support Guides, but the first three focus on: (i) Documenting fundraising decisions; (ii) Due diligence and fundraising; and (iii) Monitoring fundraising partners.

7. There is a focus on good governance and record keeping

The move to a principles-based Code means that there will be a greater need for organisations to be able to demonstrate why they think their fundraising approach is in-line with the Code and justify decisions made. There is more of a focus on the ‘governance of fundraising’ and making sure that decisions are made at the right levels in-line with the organisation’s governing document. It will also be necessary to ensure that decisions are appropriately documented e.g. in meeting minutes, policies, procedures and risk assessments etc., and organisations will need to be ready to show these records to the Fundraising Regulator if it ever investigates. The Code Support Guide on documenting fundraising decisions provides further detail on how this can be implemented in practice.

8. It is likely that changes to policies and procedures will be needed

We recommend that organisations check any fundraising policies and procedures they have, including those relating to complaints, donor due diligence, accepting and refusing donations etc., and update them so that they align with the new Code and related law and guidance. That may just mean updating code references, or wider or more in-depth changes may be needed to ensure compliance.

9. Arrangements with third-party fundraisers will need to be reviewed

If your organisation undertakes fundraising activities with third parties e.g. corporate partners, fundraising agencies or other fundraising suppliers, then we recommend checking the terms of your contracts with these third parties to assess whether they meet Code requirements around monitoring and sub-contracting etc. The Fundraising Regulator has had a big focus on this in recent years (including as part of its Market Inquiry into face-to-face fundraising) and so is an important element to get right. It is also a good opportunity to check that your contracts comply with charity and fundraising law, particularly in relation to professional fundraiser and commercial participation arrangements.

10. Awareness raising and training will be key

It will be important to raise awareness about the new Code within your organisation, including with the board of trustees. That will be particularly important due to the increased focus on ensuring that fundraising is appropriately embedded in governance and decision-making processes. A board briefing or some training aimed at boards may be helpful.

Depending on the size of the organisation, it would also be sensible to carry out some specific training for fundraising teams and any relevant external suppliers on the new Code. Even if the changes aren’t going to have a big impact on the organisation’s fundraising, it is a good juncture to have a refresher.

Bates Wells is offering bespoke in-house training on how organisations can get ready for and embed the new Code into their fundraising practices. Please get in touch if that is something that would be helpful.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further information.