Fundraising Regulator proposes an increase to the Fundraising Levy

On the 6^th December, the Fundraising Regulator announced that it is looking to review a proposed increase to the Fundraising Levy in the charity sector for the first time since 2016.

What is the Fundraising Levy?

The Fundraising Levy raises the majority of the Fundraising Regulators' funding. Those charities that spend over £100,000 a year on their fundraising activities pay a voluntary contribution through the Fundraising Levy to fund the Fundraising Regulator’s service. Currently, the Fundraising Levy is 0.1% of the registered charity’s overall annual expenditure. For example, those charities that spend £200,000 per year on fundraising activities will pay £200 towards the Fundraising Levy.

Why is the Fundraising Regulator proposing to increase the Fundraising Levy?

This proposal has been put forward due to increasing demand for the Fundraising Regulator to monitor the rise in online fundraising. This is increasing their workload and therefore requires additional funding to adequately cope with the increase in caseloads. Furthermore, the regulator is also experiencing an increase in costs due to inflation and a challenging economic climate over the past few years.

Consultation

Before the Fundraising Regulator implements any of these changes they are seeking the views and feedback of those representing charitable organisations across the sector who pay the Fundraising Levy to the Fundraising Regulator. Once this consultation phase is concluded these will be reviewed and considered by the regulator’s board before a summary of responses is published in early 2024.

Implementation

Once the consultation has been fully concluded changes to the Fundraising Levy are expected to take effect from September 2024. An additional increase will also come into effect in September 2025 which will be based on the Consumer Price Index to make sure there is a more steady increase in the Fundraising Levy. Again, charities are expected to be given plenty of notice regarding this increase.

How can we help?

At Hawsons our accountants recognise that not-for-profit organisations have very different requirements from other businesses and are currently exposed to a challenging economic climate.

Our dedicated team of charity accountants fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

Charities & not-for-profit organisations are currently facing extensive changes in their regulatory and legal framework. Given the additional pressures on fundraising, complex tax regimes, internal risk exposure, and stakeholder demands, it has never been more important to obtain specialist professional advice.