Name and type of organisation: Inside Success Union CIC (registered company no. 10174759)
Fundraising method: Street fundraising
Code themes examined: Pressurised fundraising, misleading fundraising, fundraising licenses, causing an obstruction, wearing appropriate identification when engaged in street fundraising, complaint handling and learning from complaints.
Code breach? Yes
The complaint
In January 2022, the Fundraising Regulator concluded an investigation into the fundraising activities of the community interest company Inside Success Union (ISU).
This investigation found that the company had breached the Code of Fundraising Practice (the code) in relation to:
- carrying out fundraising legally and openly
- having the appropriate licences or permits
- placing undue pressure on members of the public to donate; and
- causing an obstruction when fundraising.
Following the issue of our decision, ISU told us that whilst it had made some changes to its staff training as the result of our investigation, it did not now, or ever has, engaged in charitable fundraising.
However, within the next six months we received 21 more complaints about ISU. The complaints revolved around certain recurring themes, such as the youth vendors of ISU obstructing people's paths or shopfronts to talk to them, soliciting donations, using pressurised fundraising techniques to get people to increase donations, and engaging in charitable fundraising activities without the necessary licences.
One of the complainants raised concerns about their interaction with two ISU vendors in January 2023. According to the complainant, the youth vendor approached them and asked if they would like to make a "contribution". When asked if ISU was a charity, the vendor responded that it was. The complainant said that they questioned the employee regarding why they were not displaying the charity’s registration number or wearing the required ID.
This question led to a heated exchange with the youth vendor’s manager, who started to film the complainant with a mobile phone. The complainant said that they felt they were prevented from leaving, and the encounter left him feeling “harassed and intimidated” The complainant told us they contacted ISU directly twice to raise a formal complaint but had received no acknowledgement or reply.
What happened?
In April 2023, we sent an email and a letter via recorded post to ISU, asking them to address the ongoing concerns raised with us regarding their vendors engaging in street fundraising but received no response.
In June 2023, we sent a further email and letter via recorded post to the company directors, informing them that we had opened a second investigation about ISU. We explained that this was in response to several complaints that suggested that the company's fundraising practices remained non-compliant with the code.
Within this letter, we explained that as the complainant had exhausted the company's complaints process but had received no response, their concerns would act as the lead complaint for the investigation, and we would also consider any other information we thought might be relevant.
We asked ISU to provide us with any information it would like us to review about the lead complaint, and any other information regarding changes it had made to its processes based on our previous investigation recommendations. We have not yet received any response or acknowledgement of receipt from ISU.
Our decision
Based on the complaints we received, we were not able to establish ISU was solely engaged in selling magazines. Instead, the complaints suggested that ISU vendors were conducting street fundraising activities without the necessary licences and permissions. As a result, we concluded that ISU had breached the sections of the code that are related to conducting fundraising activities legally and transparently with appropriate permissions.
In most complaints, we found a recurring theme that members of the public felt that ISU employees placed undue pressure on people to donate. None of the complainants indicated they had been pressured to buy a magazine or sign up for a subscription; only to donate or make a “one-off contribution”. Moreover, some complainants told us that they were led to believe that the vendors were representing a charity instead of a community interest company. Considering this, we concluded that ISU breached sections of the code that prohibit misleading donors and pressuring them unduly to donate.
Furthermore, despite its training documents stating that it will respond to all complaints, we have seen that several complainants have not received a response to their concerns. We have also not received any acknowledgement or response to the complaints we raised directly with it. Considering that there is no evidence of ISU attempting to investigate or respond to the raised complaints, we consider that it has breached the section of the code that relates to complaints handling.
Based on the complaints we have received since January 2023, it appears that ISU has not followed our previous recommendations or applied the lessons learned from the complaints we presented to it. As a result, we find that it has breached the section of the code that concerns learning from complaints.
Finally, in relation to the concerns raised with us about ISU vendors positioning themselves too close to shop fronts and ATMs, and not wearing appropriate ID, it is important to note that the code standards relating to this only apply to fundraisers who are collecting monthly Direct Debits. However, it is considered good practice for fundraising organisations to follow these standards regardless of the type of fundraising activity they are carrying out. This includes wearing IDs and to avoid obstructing shop fronts, road crossings, or ATMs. Given the nature of ISU's fundraising activity, which appears to be asking for one-off payments, there are currently no requirements in the code for ISU to follow these good practise standards.
Code sections and standards considered
Code of Fundraising Practice, version effective 1 October 2019 (last updated 4 June 2021)
Section 1 General Behaviour
- Standard 1.1.1: breach identified
Section 1.2 Asking for Support
- Standard 1.2.1: breach identified
- Standard 1.2.2: breach identified
Section 1.3 Informing donors and treating people fairly
- Standard 1.3.1: breached identified
Section 2.4 Complaints and concerns about fundraising
- Standard 2.4.3: breach identified
- Standard 2.4.4: breach identified
Section 8.1 Behaviour when collecting money and other property
- Standard 8.1.1: breach identified
- Standard 8.1.2: breach identified
Section 8.2 Licenses and permission
- Standard 8.2.1: breach identified
Section 8.4 Further standards that apply to particular locations and activities
- Standard 8.4.15: no breach identified
Recommendations
We recommended that:
- If ISU’s business model is to sell magazines rather than seek charitable donations, then it must take urgent action to ensure that this is reflected in the practises of its youth vendors and that all street fundraising ceases.
- Should ISU wish to engage in charitable fundraising it should carry out a root and branch review of its approach and ensure that the appropriate permissions, procedures, staff training, and complaints-handling processes are in place to ensure full compliance with the standards in the Code of Fundraising Practice.
Further action
Following our previous investigation, we convened a meeting of several stakeholders including the Office of the Regulator of Community Interest Companies, local authorities, the Metropolitan Police, City of London Police, British Transport Police and the Chartered Institute of Fundraising, who have also received public concerns and complaints about ISU’s practises. This revealed a widespread concern that ISU is fundraising and/or street trading without appropriate licences and permissions, and its staff are acting in a way that is pressurising and in clear breach of the code.
This is potentially harmful to the public and poses a risk to the reputation of the wider charitable sector that is seeking to carry out legitimate and compliant fundraising. One local authority we have been working with has already successfully taken legal action against ISU relating to carrying out unlicensed street collections. This resulted in magistrates fining ISU for five offences and it was ordered to pay a victim surcharge and costs.
We are continuing to work with relevant licensing and enforcement bodies and other interested parties, and will be sharing our final decision with the Office of the Regulator of Community Interest Companies, London Councils, the Local Government Association, and the Metropolitan Police.