Solicitation Statement

Solicitation statements were introduced in the Charities Act 1992, stipulating that legally, before any donation is completed, fundraisers are required to make what is known in law as a ‘solicitation statement’ (commonly referred to as a ‘disclosure’) –an explanation of their relationship to the charity. This can be done verbally or in writing.

In-house fundraiser solicitation statements

Charity representatives working in-house are required only to inform potential donors that they work for charity x and that they are paid to fundraise. No further information is required.

Agency fundraiser solicitation statements

Agencies, or ‘professional fundraisers’ are required to tell donors that they were contracted and would receive a fee, but did not oblige them to divulge how much. ‘Professional fundraiser’ refers to the fundraising company, which is the ultimate employer, and not to the individual fundraiser standing on the street or knocking at a front door.

The Charities Act 2006 changed the law and, from April 1, 2008, professional fundraisers have been required to divulge what is called the ‘notifiable amount’.

The notifiable amount

The notifiable amount must show:

  • The actual amount that is being paid to the fundraising company for carrying out this particular piece of fundraising (or best estimate if the actual figure is not known), and the law requires that this is calculated as accurately as possible.

 

The Charities Act 2006 also requires that the solicitation statement must explain:

  • How the notifiable amount has been determined.

 

The 2006 act, like its predecessor, takes ‘professional fundraiser’ to mean the fundraising agency, not the individual fundraiser asking for the donation. So the notifiable amount refers to how much the charity is paying the agency, not how much the individual fundraiser is paid. Fundraisers do not have to reveal their wages.

 

Examples of agency solicitation statements that comply with the requirements of the Charities Act 2006 are:

I work for fundraising company x and we are working for the benefit of charity y. My organisation is being paid £w to recruit supporters like yourself to make regular donations to charity y. This fee was determined in the following way[method z].

 

 

 

 

I work for fundraising company x on behalf of charity y. We expect to be paid £w in connection with this particular appeal, and the method used to determine our payment was [method z].

The method most often used by F2F agencies is to agree a fixed fee per new donor recruited.
If a solicitation statement does not include these two components – notifiable amount and the method by which it was determined – it might not be compliant with the Charities Act 2006.

The penalty for non-compliance is a fine, upon conviction, of up to £5,000. The IoF’s mystery shopping procedures check whether the solicitation statement is made by fundraisers.

It is quite common for fundraisers to include as part of their disclosure statement additional information about how much they expect the campaign will raise or what they expect the return on investment to be over the time that donors remain supporters of the charity.

This is not part of the legal requirement, but information that fundraisers choose to give because it helps to put the notifiable amount into context (after all, you can’t tell how effective money spent on fundraising is until you have an idea how much it will bring in).

 

When must the solicitation statement be given?

The law requires the solicitation statement must be made some time between the fundraiser asking a person to make a gift and the donor confirming that they will give – what in law is called the ‘perfection of the gift’, or in other words, the point at which they sign on the dotted line.

The Code of Fundraising Practice, however, goes further than that and requires that the disclosure (or solicitation) statement MUST be made either before money is given by the donor or before any financial details relevant to the transaction are requested by the fundraiser (whichever is the sooner).

If a fundraiser never gets round to asking for a donation, or a person declines to make a gift, or if a person agrees but the gift is never ‘perfected’ (they change their mind before they sign the mandate), a solicitation statement does not have to be given.

However, some fundraisers choose to make their disclosures at other points during an engagement and some actually start a conversation with the disclosure. The only legal requirement is that it comes prior to the perfection of the gift.

 

Who must give a solicitation statement?

All fundraisers who make a personal ask for money are required to make some form of solicitation statement. Those who are not directly employed by the charity must include the notifiable amount in their solicitation statements, so this relates to not just F2F fundraisers but also telephone fundraisers and, in certain circumstance, consultants. Staff who are directly employed by a charity only have to say that they are paid but do not have to give the notifiable amount.

This means that F2F fundraisers working directly for the charity as part of an in-house fundraising team are not obliged to give the notifiable amount in their solicitation statements.

Because some charities use a mixture of agency and in-house teams, some fundraisers working for such a charity will be required to give the notifiable amount but others will not.

No solicitation statement is required for any form of fundraising (either outsourced or in-house) where the fundraiser does not make a one-to-one personal ask, such as direct mail, television or press advertising, and digital fundraising (email, SMS etc). Trustees, if they are fundraising, also have to give a solicitation statement. Only volunteers are exempt.

The Office of the Third Sector (OTS) used to have detailed guidance on the various forms of solicitation statement posted on its website. When the OTS was replaced by the Office of Civil Society and Innovation following the 2010 general election, this information was removed and has not yet been put back. However, more information on the solicitation statement can be found in the downloadable Cabinet Office guidance on the Charities Act 1992, as amended by the Charities Act 2006.

 

To recap:

  • All F2F fundraisers making a personal ask (other than volunteers) must make a solicitation statement.
  • Those employed by a third party must disclose the ‘notifiable amount’ in their statements; those employed directly by the charity need not (but they must at least say that they are paid).
  • The notifiable amount is the actual amount of remuneration the fundraising company receives from a charity in connection with an appeal or the best estimate if the actual amount is not known. It is not the pay an individual fundraiser receives.
  • The method by which the notifiable amount is determined must also be included in the solicitation statement.
  • The solicitation statement has to be made at some point prior to the ‘perfection of the gift’ – the point that a donor agrees to sign a Direct Debit mandate.

 

Because some charities use a mixture of agency and in-house teams, some fundraisers working for such a charity will be required to give the notifiable amount but others will not.