Certification of fundraising in the Netherlands–

Dutch experiences with International Perspective

Adri KempsDirector CBF and Secretary General ICFO

www.cbf.nl - a.kemps@cbf.nlwww.icfo.org

Sydney, 22 July 2011

Fundraising income as registred by CBF 1965 - 2008

In 2009 € 1.3 billion was available for:

Nature

Social Welfare

Culture

Internationaldevelopment

Health

Independent Monitoring?Independent Monitoring?

1 - State Regulation via - Registration,

- Fiscal Oversight

2 - Self Regulation via- Code of Conducts, issued by umbrella bodies- Capacity Building- Direct Transparency

3 - Independent Monitoring via- Seals-of-Approval (Accreditation) by independent

agencies- Donor Advice by “Watchdog” agencies

Independent Monitoring of Charities – the “Third Way” Independent Monitoring of Charities – the “Third Way”

ICFO - the association of national monitoring bodiesICFO - the association of national monitoring bodies

Founded 1958

Members in Austria, Belgium, Canada, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland, Taiwan, UK, USA,

Independent monitoring agencies, not yet ICFO members but extablished contacts , in: Cambodia, India, Indonesia, Mexico, Philippines

International Committee onInternational Committee onFundraising OrganizationsFundraising Organizations

ICFO’s MissionICFO’s Mission

Donors’ trust – a decisive factor

“Informed Trust” instead of “Blind Trust”

ICFO Standards for NPOs working internationally

Independent Monitoring Agencies are “Partners” and “Supporters” of the reliable Charities

ICFO and its members are building ICFO and its members are building BRIDGES OF TRUSTBRIDGES OF TRUST

Centraal Bureau Fondsenwerving (CBF)Centraal Bureau Fondsenwerving (CBF)

Register and website (voluntary reporting) approx 1.350 ngo’s

Knowledge Centre (database, Report on Fundraising and digi- newsletter)

Seal-of-Approval: 272 sealed charities, 77 certified small charities (1.3 billion EUR donations) and 19 Statements of no objection for start up charity

annual monitoring, on-site-visits, audit report, also used by goverment, the media

Donor Advisory Service: approx. 1300 non-sealed charities (descriptions, judgements, warnings); individual advice

The The NetherlandsNetherlands

CBF Seal for charitiesCBF Seal for charities

Fundraising: truthful, accurate, not misleading, no pressure to donors

Finances: > audited by CPA based on RJ 650 standard developped by CBF, 25% fundraising

costs, policyplan, controlsystem on expenditures, annual report.

Controlsystems: > policyplan and expenditures

Governance: well functioning planning and supervision, evaluation methods effectivity / efficiency, stakeholders, transparency on salary

Normative and principle based Normative and principle based standardsstandards

Independent MonitoringIndependent Monitoring

membership based <-> charities not being members

Professionals <-> also: Volunteers

only accrediation <-> also: information on other charities (sometimes even: warnings)

100% own income <-> also: public subsidies

admin. cost ceiling <-> “reasonable” amount for admin + fundraising costs

““Watchdogs” worldwide: STRENGTH BY Watchdogs” worldwide: STRENGTH BY DIVERSITYDIVERSITY

Independent MonitoringIndependent Monitoring

Quality measurement: Outcome and effectiveness of the charitable activities

Administration and Fundraising costs: more detailled rules (maybe, more ceilings)

Professional staff instead of Volunteers

TRENDS towards further Common PatternsTRENDS towards further Common Patterns

State RegulationState Regulation

Charitable activities and civil engagement are voluntary and private acts of citizens. Therefore, state involvement in those activities should be restricted to an absolute minimum.

State can protect and support civil engagement by prosecuting criminal

abuse of donations and charitable organizations and by leaving further regulation or ruling to independent monitoring agencies and self

regulation schemes – in the best sense of SUBSIDIARITY.

State authorities are not very accustomed to the special character of public benefit activities, their dynamic development, and the mentality

of their leaders. Therefore, a significant degree of state regulation bears a permanent risk of being not adequate or disproportionate.

Strengths and WeaknessesStrengths and Weaknesses

Self RegulationSelf Regulation

“Self Regulation is the voluntary acceptance of a code of conduct by the members of a club. This code is usually created by an ‘umbrella’ organization. (…) The main problem with codes of conduct is their reliance on self-reporting, i.e. the organizations are trusted to follow the

regulations without any follow-up checks, leaving significant space for abuses and release of false information.” (Prof. Dr. Andreas Ortmann, 2005)

Self Regulation can significantly contribute to a culture of transparency and reliability in the Third Sector, as well as to an improvement of the sector’s processes and practices (capacity building).

In order to sustainably enhance DONORS’ TRUST in charities, self regulation needs to be completed by INDEPENDENT MONITORING.

Strengths and Weaknesses Strengths and Weaknesses

ConclusionConclusion

Use clear concepts and terminologies:Transparency has to be transparent itself

Umbrellas = self regulation (code of conducts, etc.)

Monitoring bodies: third party regulation (accreditation, certification, seals/labels)

Public oversight bodies = state regulation

Trust, Transparency, and

Ethical Issues in Fundraising

ConclusionConclusion

Information by the NGOs themselves:Direct Transparency

Information by independent „watchdogs“Monitored Transparency

Independent information creates „Bridges of Trust“

Reliable Information

ConclusionConclusion

State Regulation, Independent Monitoring, and Self Regulation: all of them have their special strengths and limitations.

DONORS’ TRUST can be served best if the three methods are properly combined without mixing up their procedures and

terminologies.

CombinationCombination, not , not AmalgamationAmalgamation