Charities shouldn’t be complacent about problems in the public collections system – but we need to ensure that the solutions are proportionate, says Wendy Mitchell

Over recent months, and following Lord Hodgson’s Review of the Charities Act 2006, the Charity Retail Association (CRA) has been in discussions with other sector bodies, as well as our own members, about how the regulation of charitable fundraising could be improved. As the trade body for charity shops, the house-to-house collection of clothing or goods is of critical importance to our members.

We’ve made some real progress around what the principles of a more sensible approach might be: proportionate and clear about the problems we’re trying to address; flexible enough to make sense across the huge range of public collections activity that takes place; sustainable so that charities are able to continue their legitimate fundraising activities; and, crucially, transparent for the public.

The CRA’s position is simple: while we want to address any problems identified by the public, we’d like to achieve this with the least additional bureaucracy for our members, so that they can continue to carry out this vital form of stock collection. Competition on the doorstep has intensified considerably over recent years as the price of second-hand textiles on the international markets – mainly for re-sale in Eastern Europe and Africa – has led to more and more commercial operations collecting clothing to sell abroad for profit. This has gradually reduced the return rate for charity shops to an all-time low of 6 per cent of total stock. In 2008, the figure was 19 per cent. We are very aware that any further costs or complications in the system might lead to more of our members pulling out of this type of fundraising altogether.

This would be a genuine shame – and not only because of shops having less stock to sell, and the knock-on effect on charitable income. The public genuinely do value this method of donating, particularly those who may find it difficult to get down to the local charity shop because of age, immobility, or family and work commitments.

Whatever conclusions we come to shouldn’t be prohibitive for legitimate charities. The abolition of National Exemption Orders, as proposed Hodgson, could cost larger charities millions. And contrary to Hodgson’s assertion, it wouldn’t do smaller charities without an NEO any favours either. Local licensing authorities would have to process hundreds of thousands of extra applications, clogging up the process and causing inevitable delays as councils try to deal with the backlog. Some consistency over the length of licences, automatic renewal for collectors with a good reputation, and abolition of some of the unnecessary paperwork would have been much more welcome if the object was to even the playing field. The review was a missed opportunity in terms of making the licensing system simpler for charities.

Meeting the challenges

It’s important that these sorts of proposals – which would reduce some aspects of regulation that aren’t working – aren’t mistaken for complacency about problems that do exist.

There is a valid concern from the public about how to identify legitimate collections, given the increase in fraud and theft around charity bags. It’s important that we do whatever we can to help the public differentiate between legitimate and illegitimate fundraising – and understand the different types of collection coming through the door. Greater transparency will be key to this – and better advertising of the legitimate collectors in any given area will help.

Local authorities also need to know who is able to collect in their area. A major discrepancy in the system continues to be that companies that aren’t collecting for charities are completely deregulated, and require neither a license nor an exemption order. One of the sensible recommendations in the Lord Hodgson Review was to bring these companies into the regulatory tent. This is surely essential.

But the key point here is that we need to follow the evidence as we design something new, and make sure we strike a balance. House-to-house collections for clothing are quite different from other forms of fundraising. They have less interaction with the public compared with face-to-face doorstep or street collections and many people see them as a convenient way to get rid of unwanted clothing. We need to make sure that we don’t undermine the development of that proportionate and sustainable new regime, which we all aspire to create, by developing over-complex regulatory solutions.

We will continue to explore all options on the table for a better system. However, while we need to address any existing problems, we also need to stand up for legitimate fundraising activity and ensure the continued viability of this key method of generating charitable income.

Wendy Mitchell is Head of Policy & Public Affairs at the Charity Retail Association

This article first appeared in The Fundraiser magazine, Issue 24, December 2012