[ Report by the Charity Commission for England & Wales 2003: ]
Contents [list added by CharityBags]
[start of report]
1. This is a statement of the results of a Class Inquiry made under section 8 of the Charities Act 1993 into door-to-door clothing collections by charities or in the name of charity.
2. This inquiry report is not specific to any individual charity. It is a generic report that sets out the main issues arising from the relationship between door-to-door clothing collections and charity.
3. Door-to-door collections are a long established practice providing a valuable method of raising funds for charitable purposes.
4. In most instances a permit is required to undertake door-to-door collection for charitable purposes, under the House to House Collections Act 1939. These are usually issued by the relevant Local Government Authority in the area in which the collection(s) is(are) to take place. (Currently, in certain areas, the local police are responsible for issuing licences.)
Some National Charities gain an Order of Exemption under section 3 of the House to House Collections Act 1939, issued by the Home Office, and as a result do not need to apply for collection permits locally. However, these charities should notify the relevant Local Authority of the dates and places they intend to collect.
5. Other legislation also impacts on such collections. For example:
6. The Inquiry was opened in October 2002.
7. The Inquiry was closed in March 2003. This report of the Inquiry was subject to delayed publication whilst a number of further enquiries were made that directly relate to the findings. This also allowed consultation with other agencies and the resolution of a number of jurisdictional concerns, clarifying the basis for future regulation of this activity by the Commission. Therefore, the result of the delayed publication of the report is that the Commission has reached a settled position on its future involvement in these matters and wider lessons from the Inquiry can be shared.
8. The Association of Charity Shops has estimated that misleading and bogus door-to-door clothing collections, which give donors the impression that they are giving to charity, cost the bona fide sector a minimum of £1,000,000 per annum in lost revenue. In 2002, the Association noted the rise in collections by commercial organisations, by 'bogus' collectors purporting to be charities and also by local authorities as part of their own recycling initiatives. They state that all of these have contributed to a reduced level of donations to charity shops.
9. The Commission regularly receives complaints and letters of concern from the public and other regulatory agencies regarding door-to-door clothing collections which either directly state that they are in support of charity or that are perceived to give the impression of a charitable or philanthropic purpose.
10. The complaints received by the Charity Commission have a number of recurring themes:
11. We therefore opened an Inquiry to ascertain the level of risk there was that collections in the name of charity were being made by organisations not operating for a charitable purpose and to identify and examine compliance with relevant legislation, including that contained in the Charities Acts. One aim of the Inquiry was to establish the scope of the Charity Commission's remit to deal with complaints and concerns regarding the activities of companies carrying out door-to-door clothing collections and the jurisdiction of other regulatory authorities. This would be used to inform the Commission's future advisory and regulatory interest and involvement in such activities.
12. The class for the Inquiry consisted of all those collections within 2 areas (Herts & Beds and Brent & Harrow) at 2 specific times (September and November 2002). These locations were selected as the Commission had information to suggest that clothing collection companies with unclear charitable links were operating in these areas at the time.
13. However, officers also sought to monitor other complaints received by the Commission regarding door-to-door clothing collections during the lifetime of the Inquiry. These very often directly impacted upon the organisations or the regulatory issues examined within the Inquiry.
14. At the time of Inquiry, there were 48 holders of Orders of Exemption under the House to House Collections Act. The Commission wrote to the promoters of all of these to determine whether they undertook this method of fundraising and, if so, the volume and value of the clothes they collect. In addition, we asked particularly whether they collected in the areas and at the times selected for specific attention under the Class Inquiry.
15. The Commission also wrote to the Metropolitan Police and to the Local Authority Licensing Departments in Bedfordshire and Hertfordshire, to ascertain whether any licenses had been approved for door-to-door clothing collections in their areas in September and November 2002.
16. In addition, the Commission wrote to 7 clothing collection firms with unclear charitable links to enquire whether there was any charitable or otherwise philanthropic or benevolent purpose to the collections and, if so, to obtain further information.
17. Lastly, during the course of the Inquiry and beyond, the Commission monitored the complaints, concerns and other enquiries it received regarding door-to-door clothing collections.
18. 24 promoters who held Orders of Exemption responded to the Commission's correspondence. Of these, 63% did not undertake clothing collection door-to-door and 1 charity (4%) confirmed that they had not collected in the areas and times specific to the Inquiry, but otherwise did not confirm whether they collected clothes on a door-to-door basis.
33% of the charities did undertake door-to-door collections for clothing. However, it was sometimes difficult for charities to provide exact details of the volume and value of the collections due to the manner in which these organisations collate and hold information.
A number of charity officers expressed the view that, although no statistical information was available, there was a feeling that where a commercial collection had operated recently in similar areas there was a decreased yield for the charity. Officers also noted that public confidence plays an important part in achieving the level of donations needed and know from experience that trust can be undermined by the actions of unauthorised collectors.
19. The only collections in the periods and places specifically subject to the Inquiry that the relevant Local Government Authorities and Metropolitan Police were aware of were made by commercial companies not connected to charities that did not require a licence.
20. The Commission received only 2 replies to correspondence sent out to commercial clothing collection companies. One response indicated that the firm concerned had closed in September 2002 and that no further collections were being made, unless someone was using the old leaflets of the company without permission. The other stated that the person we had contacted had resigned from his role as Company Secretary, which he had only taken on to assist people whose English was poor with registering a company in the UK. Both claimed that they had since lost contact with the organisations and neither could provide further information. However, one did indicate that the clothes collected by the organisation of which he was a former officer were sent to Lithuania, from where the leaflets also originated.
21. Commission officers found several causes for concern amongst the door-to-door clothing collection literature examined. In particular it was found that:
22. In the majority of cases, where the leaflets issued by an organisation appeared to indicate that it was collecting for a charitable purpose but where this appeared not to be the case, or where the fact of the matter could not ascertained, the Commission referred leaflets to the ASA for consideration under the Misleading Advertising Directives.
As a result of these referrals by the Commission and others the ASA adjudicated against the leaflets of a number of door-to-door clothing collection companies. (A list of adjudications can be found on the ASA website: www.asa.org.uk.) Consequently, many organisations have amended their leaflets to state that they are businesses not charities and most no longer claim that they support charitable purposes. The ASA has adjudicated against organisations distributing leaflets which state that they are not charitable collections on the basis that they remain, on balance, misleading to the public. On this basis, the Commission will continue to refer cases to the ASA as appropriate. This should serve to lessen the confusion in the public mind and, consequently, reduce the risk of collections by registered charities being adversely affected by the activities of non-charitable clothing collection firms.
(Any organisation that ignores adjudication by the ASA may be referred by them to the Office of Fair Trading (OFT) or Committee of Advertising Practice (CAP) for sanctions.)
23. The Commission has opened a number of inquiries, under section 8 of the Charities Act 1993, into door-to-door clothing collections on the basis that the wording of the leaflets advertising the collections is such that the collections appear to represent a charitable appeal. Any person holding funds impressed with charitable trusts is a "charity trustee" for the purposes of the Charities Act 1993 and must apply such funds in furtherance of the purposes of those trusts. (Jones v AG ) The Commission would have jurisdiction over such a charity trustee and the charitable funds they are holding. (Final determination on whether a collection constitutes a charity rests with the Court. However, the Commission, as regulator, is entitled to take a view on such matters.)
24. Given the problems of jurisdiction referred to above, the Commission feels that the most effective regulation of this risk to charity is through consumer education. As such, we have undertaken proactive work to raise awareness amongst the public regarding bona fide and bogus door-to-door clothing collections as part of our wider safer giving campaigns. The guidance warns householders across the country to be on their guard against commercial companies that use the impression of charity to obtain clothes that are subsequently sold for profit. If people have any doubts about the legitimacy of organisations dropping bags or leaflets through their letterboxes they should call the Commission's helpline (0845 300 0218) or contact their local Trading Standards office. We also remind people that they always have the choice to give directly to a charity or to give their unwanted clothes to their local charity shop.
The Commission has also worked with a number of other regulators on additional consumer education programmes and to raise the profile of this issue across the relevant regulatory authorities. The Commission is committed to continuing this work.
25. The Commission continues to evaluate any potentially suspect collection over which it may have jurisdiction. That is, those collections where a recognised UK charity is referred to in the literature or which appear to have created a de facto charity by virtue of the wording used on the leaflets distributed.
26. The Commission has advised the trustees of a number of charities involved with commercial clothing collection companies regarding appropriate written agreements and best practice guidelines.
27. The Commission acknowledges the impact of bogus and misleading door-to-door clothing collection activity on the charitable sector. However, in many instances it is not the appropriate authority to regulate, investigate and take enforcement action, where required. The Commission has identified those instances in which it is the appropriate authority to take action, as mentioned in paragraph 25 above. In many instances it is only the promotion of the collection in such a way that it might appear to be a collection for a charitable purpose which impinges upon the regulatory remit of the Charity Commission. The fact of the collection itself, as a commercial operation, is outside the remit of the Commission. Our role as regulator is therefore achieved if and when the advertising is changed to reflect that the collection is a commercial operation. This means, in many instances, the regulation of door-to-door clothing collection falls squarely within the remit of the ASA and not of the Charity Commission in terms of correcting the misleading promotion of the collections. Where this is the case the Commission will either refer the matter to the ASA directly or recommend that the complainant contact the ASA.
28. The Commission will continue to work with partner agencies to safeguard the good name of charity and to protect and regulate collections for charitable purposes.
29. There is no suggestion that door-to-door clothing collection as a method of fundraising is in any way itself suspect. Nor is there any suggestion that any charity using door-to-door clothing collections to collect goods and raise funds should not continue to do so.
30. The Charity Commission works with various organisations across the country to promote its Safer Giving campaign. The main aim of the campaign is to raise public awareness about safe ways to donate to charity and to stamp out fraudulent collections that have nothing to do with genuine good causes. If you are approached by somebody collecting for charity, and you're not sure whether they are genuine or not, our Safer Giving code provides some tips that may help you feel more comfortable about giving.
The Commission strongly recommends that all collectors should:
Genuine collectors should be happy to answer questions and won't mind you checking them out. We want to make sure that donations go to legitimate charities and not fraudsters.
If you are doubtful about a collector:
Last updated: 29 Sep 2005
[end of report]
Notes by CharityBags
The Clothing Collections report above is © Crown copyright 2003
See the Copyright statement on the Commission's website
Source of report - Charity Commission website on 25 Nov 2005
Changes made by CharityBags :
See also the Introduction page (by CharityBags), describing the Report