Self-regulation and accountability

In 2005, Fundraising Institute Australia commenced the process of overhauling its Codes of Ethics and Professional Conduct, a significant project that is intended to enhance the self regulation agenda for professional fundraising and to provide greater transparency and accountability in the use of donor funds. 

FIA undertook this project as independent research commissioned by FIA (Zappala, 2004) revealed that in the face of government and public scrutiny, new models of regulation were necessary and these needed to take into account the responsibility of the fundraising sector itself with regard to self-regulation. Self-regulation and accountability are issues strongly debated beyond the realm of the fundraising arena and the nonprofit sector.

Accountability in the corporate world turned to self-regulation and the development of voluntary codes of conduct as early as 1949, with a code developed by the International Chamber of Commerce. Even with a history of over 50 years in the development of codes, Kavaljit Singh notes, ‘there is no consensus on the precise definition of a code of conduct’. Singh notes that codes range from succinct statements to detailed ‘benchmarks and guidelines’.

Nonprofit organisations soon realised the value of codes as a means of moral persuasion to address issues of public interest. Interestingly, Rhys Jenkins points out that some corporate codes were developed as a result of ‘NGO activism around issues of corporate responsibility’ leading to guidelines on corporate social responsibility.

FIA is developing a suite of documents that will provide principles for professional fundraising (such as ethics, professional conduct, donors’ rights and a transparent complaints process) and standards of best practice in different fundraising channels. These, like the current codes, will be mandatory for members.

The first of the standards to be developed by working groups whose members are drawn from across Australia are for fundraising through events, bequests, face to face fundraising and charitable telemarketing, soon to be made available as drafts for public discussion.

In the first round of public consultation of the draft principles, six state government submissions were received, each providing useful comments that will guide further development of the codes and enhance the nexus between government regulation and industry self-regulation.

FIA is working closely with respective state government departments who regulate professional fundraising, to develop a more co-regulatory environment, similar to the current situation in the UK where a recent move has seen the Institute of Fundraising’s regulatory framework set up as a separate nonprofit organisation known as the Fundraising Standards Board.

We acknowledge the limitations of voluntary codes, firstly, they are voluntary. Voluntary codes are restricted in their universal applicability and may not regulate third parties. While the standards describe best practice, they may not be the highest standard of practice.

Nevertheless, alongside government regulation, voluntary codes raise the bar in professional practice, and when combined, are important instruments in managing both financial and reputational risk. 

If you would like to contribute to FIA’s codes project visit the FIA codes website.