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Fundraising levy to increase following review, Regulator announces

Melanie May | 17 April 2024 | News

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The Fundraising Regulator has today (17 April) announced it is to increase the fundraising levy and registration fee following its review.

The levy makes up the majority of the Fundraising Regulator’s funding and sees charities that spend over £100,000 on their annual fundraising activity pay a voluntary contribution to fund the Regulator’s services. It says that the levy covers around 2,000 charities each year, with charities charged according to how much they spend on fundraising.

The Fundraising Regulator announced the review back in December 2023, saying that it was proposing an increase because of new regulatory responses to the rise of online fundraising, an increase in its caseload, commitment to ‘proactive and reactive’ regulation, and rising costs. It sought views from people responsible for paying the Levy or maintaining registration with the Regulator within their organisation, and 222 responses were received.

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Following the review, the Board has agreed that the changes will take effect over two years – this is designed to help mitigate the impact of the increase.

Staggered increases will take place in September 2024 and September 2025, with further increases will then be tied to the Consumer Price Index (CPI) to make them more gradual, and charities will be given advance notice before rises come into effect. In September the registration fee for charities outside the levy will also increase from £50 to £60.

Lord Toby Harris, the Chair of the Fundraising Regulator, said:

“In December 2023 we consulted the sector to seek responses to our proposed changes to the fundraising levy. Taking into account the responses received we agreed that whilst the levy will have to go up for the first time in eight years, the proposed increases will be phased in over two years (in September 2024 and September 2025).

 

“We are committed to supporting charities in this rapidly evolving sector, and tackling the emerging issues that affect public trust in fundraising. Simply put, it is the levy that enables us to do this and to continue doing it effectively in the shared interests of charities and the generous public so that there is a continuing positive environment for fundraising to prosper.”

Claire Stanley, Director of Policy and Communications at the Chartered Institute of Fundraising, said it was ‘disappointing’ that the increase represented a 50% increase for many charities, and expressed concerns that linking the levy to CPI might make charities more vulnerable to inflation.

She commented:

“Although we understand the need to increase the levy and registration fees, this has come at a time when reduced statutory funding and rising costs are making charities of all sizes conscious of their spending – and we are disappointed that the increase still represents a 50% rise in levy fee for many fundraising charities, however splitting it over two years may be preferrable to paying it all in one go.

 

“Going forwards, while we recognise that linking the levy to CPI would potentially make it easier for charities to anticipate future increases and plan accordingly, we do have concerns that this would leave them more vulnerable to inflation – and that in the event of a sharp rise in inflation, as we have seen in recent years, which would cause the CPI to jump up, charities would face very high levy costs at a time when other costs are increasing, services are under pressure, and funding sources are uncertain. Taking the views of our members into consideration, our recommendation would be capping the levy increase at 4% – and further modelling to fully understand the impact this will have on charities long-term.”

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