Penny Appeal has been criticised by the Fundraising Regulator for a lack of clarity in its
appeals to sponsor children in need of support.

The regulator’s probe was launched following complaints claiming that donations made through the charity's child sponsorship appeals and water sanitation initiatives were not being used to support children featured.

This investigation focused on its OrphanKind, Hifz and Thirst Relief appeals.

The regulator found that while donations are restricted to these appeals they are not allocated “exclusively to a sponsored child, a specific project they were given for, or to the donor’s preferred location for building a well”.

It added: “We consider that this distinction has not been sufficiently communicated to donors either historically or currently.

“We have found some breaches of the code, but we have seen no evidence to suggest the money donated by the complainants was not used for the appeal they originally selected.”

Specifically referring to the Orphankind and Hifz appeals the regulator said that named children featured “may benefit directly from donations” for items such as school uniforms.

“However, from what we have seen, it is not sufficiently clear to donors that children primarily benefit indirectly as the result of the accumulated sponsorship funds from these appeals being distributed to the communities or projects that the children are part of, rather than directly from their individual donations,” found the regulator.

“On this basis, we have found that the charity breached the sections of the code that relate to misleading donors, treating donors fairly and making sure that its fundraising does not suggest that money is for a restricted purpose, such as exclusively helping a particular child.”

But no similar breach was found for the Thirst Relief appeal and there is “no evidence to suggest that donations have not been spent on building wells in the countries selected”.

However, the regulator did find that this appeal breached its code by omitting essential information for donors. It found that the link to terms and conditions around regular donations “is on very small print in the footer of the website pages”.

The regulator is further concerned that “historically” it did not have a robust record-keeping system in place”. This led to one donor being wrongly charged administration fees.

Last year Penny Appeal confirmed to the regulator that it had updated its website and payment platform to make Direct Debit information clearer.

A breach in the fundraising code around complaints handling has also been found.
Two complainants were not called back as promised by the charity. In one case the charity failed in its response failed to “acknowledge or apologise” for poor handling of complaints.

The regulator notes that “positive steps” have been taken by the charity to improve its complaints handling.

It also acknowledges that Penny Appeal has agree to comply with further recommendations that include providing donors “with clear and prominently displayed information before the point of donation”.

The charity is also asked to “give greater prominence to its statement explaining what it means by ‘where most needed’ in relation to how it will use donations if it is unable to use them in line with the donor’s original request”.

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