Adapting to the Updated Code of Fundraising Practice
How Will the New Fundraising Code Impact Your Charity?
The Fundraising Regulator is making a big move. Expected to launch in April or May 2025, the new Code of Fundraising Practice will replace the old, rule-heavy system with a principles-based framework.
What does that actually mean? Fewer prescriptive rules. More accountability.
Until now, fundraising compliance has been about checking off boxes. Follow the steps, meet the criteria, and you’re good to go. But under the new framework, charities must ensure their decisions align with these four core principles:
- Legal – Fundraising must comply with UK laws and regulations.
- Open – Donors have a right to know how their money is being used.
- Honest – Communications must be clear, truthful, and upfront.
- Respectful – Fundraisers must act fairly, especially when engaging with vulnerable individuals.
For trustees, this shift is a fundamental change in responsibility. No more relying on rigid rules to dictate fundraising practices. Instead, charities will be expected to demonstrate ethical decision-making, sound judgment, and full transparency.
How will this affect your organisation? What changes do you need to make? And how can you stay compliant while maintaining public trust?
Let’s break it down.
What’s Changing in the 2025 Code of Fundraising Practice?
For years, the Code of Fundraising Practice has been packed with detailed rules and step-by-step instructions on how charities should operate. But in mid-2025, that’s changing.
Rather than outlining exactly how fundraising should be done, the new code focuses on broad ethical principles.
The goal is to ensure charities remain legal, transparent, honest, and respectful while giving them room to adapt.
What This Means in Practice
- Less rigid guidance – No more detailed checklists. Charities will need to interpret and apply principles based on their own circumstances.
- More accountability – Fundraising decisions must be justified, not just followed mechanically. Trustees and leaders will need to think critically about ethics and impact.
- Stronger legal alignment – Instead of repeating existing UK laws, the new code will directly reference legal requirements, making it easier for charities to stay compliant.
Key Updates Trustees Should Watch
1. Fundraiser Compensation Rules Are Being Clarified
The code will offer clearer guidelines on how charities pay fundraisers, particularly when it comes to commission-based arrangements.
2. A Stronger Emphasis on Transparency
Charities won’t just be expected to avoid misleading statements; they’ll need to proactively ensure donors fully understand where their money is going. Expect a bigger role for impact reporting to build trust.
3. More Responsibility for Trustees
With fewer strict rules, the weight of responsibility shifts to trustees. They’ll need to ensure fundraising aligns with their charity’s values and ethics, requiring more internal oversight, clear documentation, and well-justified decisions.
4. New Guidance on Third-Party Fundraising
Charities relying on external fundraisers will need to monitor them more closely. The new code makes it clear: third-party fundraisers must meet the same ethical standards as the charity itself.
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What Trustees Need to Do Now
The 2025 Code of Fundraising Practice shifts more responsibility onto trustees, making proactive preparation essential.
Here’s what you should do now.
Step 1: Review and Update Fundraising Policies
With fewer step-by-step rules, charities must ensure their own policies align with the four core principles: legal, open, honest, and respectful. If something isn’t explicitly covered by law, it’s up to the charity to interpret and apply the principles responsibly.
What to do now:
- Audit existing fundraising policies: do they reflect the new principles-based approach?
- Clarify fundraiser compensation rules, particularly for commission-based pay structures.
- Update internal guidance to reflect the code and ensure staff have clear expectations.
Step 2: Train Fundraising Staff and Volunteers
A principles-based system requires critical thinking. Fundraisers won’t just follow instructions; they’ll need to make judgment calls. That means everyone involved in fundraising needs to understand the new approach.
What to do now:
- Run training sessions to introduce the principles-based framework.
- Use real-world scenarios to help fundraisers navigate ethical challenges.
- Ensure fundraisers communicate transparently, especially when explaining how donations are used.
Step 3: Strengthen Trustee Oversight
More flexibility means more scrutiny. The Fundraising Regulator has made it clear: trustees must take an active role in overseeing fundraising decisions. Delegating responsibility without oversight is no longer enough.
What to do now:
- Schedule regular board reviews of fundraising activities and major decisions.
- Document key fundraising choices, especially those involving ethical considerations.
- Monitor third-party fundraisers to ensure they follow the same ethical standards as your charity.
Step 4: Improve Transparency in Donor Communications
Vague or unclear fundraising messaging won’t cut it anymore. Charities must do more than avoid misleading donors – they must ensure full transparency about how donations are used.
What to do now:
- Review donation pages, fundraising emails, and marketing materials. Are they clear about where funds go?
- Consider impact reporting to provide donors with real evidence of their contributions in action.
- Train fundraisers to answer donor questions with honesty and clarity.
Step 5: Stay Engaged with the Fundraising Regulator
The Fundraising Regulator is offering guidance and resources to help charities through this transition. Staying informed will make compliance easier and less stressful.
What to do now:
- Subscribe to updates from the Fundraising Regulator for the latest guidance.
- Attend webinars, training sessions, and sector events to stay ahead of best practices.
- Seek advice early if you have concerns about compliance. Don’t wait until there’s a problem.
What Happens If a Charity Fails to Comply?
The 2025 Fundraising Code puts charities under greater scrutiny, and the consequences aren’t just bureaucratic. Public complaints, regulatory investigations, and reputational damage could all come into play. Here’s what non-compliance could mean for your charity.
1. Complaints from the Public or Donors
Under the new code, the Fundraising Regulator handles complaints from donors or members of the public who believe a charity’s fundraising is misleading, unfair, or unethical.
The key difference? Complaints will now focus on whether a charity upheld the core principles, rather than whether they followed a specific rule.
Here’s an example:
A charity advertises that “100% of donations go directly to the cause.” In reality, a portion covers administrative costs. Even if there was no intent to deceive, this could be flagged as misleading under the Honest principle.
What happens next?
- The Fundraising Regulator assesses whether the charity upheld the principles of the code.
- The charity may be asked to justify its approach and provide evidence that decisions were made ethically.
- If found non-compliant, the regulator may issue formal recommendations for improvement.
2. Investigations by the Fundraising Regulator
If a complaint is serious or widespread, the Fundraising Regulator may launch a full investigation. This could happen if:
- A charity is found to have pressured or misled donors.
- A charity fails to monitor third-party fundraisers, leading to unethical practices.
- Fundraising activities lack trustee oversight, creating a risk of misconduct.
Potential outcomes of an investigation:
- A public report highlighting the charity’s failures.
- Legally binding recommendations requiring policy changes.
- In severe cases, a referral to the Charity Commission for further action.
3. Reputational Damage and Loss of Public Trust
Charities rely on public goodwill. If donors lose trust, the impact can be immediate and long-lasting.
- Declining donations – Donors may take their support elsewhere.
- Loss of volunteer support – Ethical concerns can drive volunteers away.
- Damaged partnerships – Corporate and funding partners may hesitate to be associated with a charity under scrutiny.
Even smaller charities aren’t immune. A single high-profile complaint could jeopardise public confidence – and once trust is lost, it’s tough to rebuild.
Next Steps for Trustees
The new Code of Fundraising Practice is about building stronger donor relationships and maintaining public trust. The shift to a principles-based approach means charities must actively manage and justify their fundraising decisions, rather than just following set rules.
Let’s recap the 5 steps you’ll need to follow moving forward:
- Review and update fundraising policies to reflect the new principles.
- Train fundraising staff and volunteers to understand ethical compliance.
- Monitor third-party fundraisers to ensure they meet standards.
- Improve donor transparency – be clear about how funds are used.
- Stay informed – engage with regulatory updates and sector guidance.
Need help preparing for the new code? At Charity Accounting Partners, we help charities navigate compliance without the headache. Let’s make sure you’re ready.
Contact Us Today
Reach out to us for more information on our services or with any general questions. You can contact us through our website’s contact form
charityaccountingpartners.co.uk
or via email at support@charityaccountingpartners.co.uk.
We’re a small charity with minimal resources. How do we manage compliance?
Transparency, honesty, and fair treatment of donors are the core principles. Even with limited budgets, you can develop clear guidelines and ensure trustee oversight without overcomplicating your processes.
Can we still pay fundraisers on commission?
Yes, but only within ethical limits. Your arrangement must not pressure donors, and all fees should be transparent and well-documented.
We use third-party fundraisers – are we still on the hook for compliance?
Charities are ultimately responsible for making sure third-party fundraisers follow the code. This includes having clear contracts and proper oversight.
How should we prepare for possible audits or investigations?
Document your decisions, review fundraising practices regularly, and keep your communications transparent and truthful. If a problem pops up, address it head-on and work openly with regulators.
Author Spotlight
Carl Wakeford, ACA
Carl began his career within the Big Four where he spent four years auditing many public and private sector organisations, and qualifying as a chartered accountant. Carl specialised in risk consultancy, helping organisations strengthen financial processes and controls. Since then, Carl has worked within multinational commercial finance teams, fast paced start-ups, the charity sector, and is now the CEO of Charity Accounting Partners.
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