The two regulators are specifically advising charities to avoid entering into fundraising arrangements that exhibit specific characteristics they believe suggest could give rise to situations which may harm the charity’s reputation or result in additional risk.

These include arrangements with a third party fundraiser which bear all the hallmarks of a professional fundraiser arrangement, but which are structured to avoid the legal rules. In such circumstances the fundraiser may be described as an adviser or consultant in the contract even though in reality they are really controlling the solicitation of funds on the charity’s behalf.

The regulators point out that these arrangements can also mean that it is not clear to the donor that the fundraising is being delivered by, or with the significant involvement of, a third party at a significant cost to the charity.

Charities should also avoid entering into medium or long term contracts that have very limited termination or adjustment provisions, or arrangements in which the charity only benefits from the arrangement at the very end of the contract term, and where there is the possibility that the charity will not benefit at all.

In addition, charities should not make arrangements where the fees received by, or payments made to third party fundraisers damage public trust and confidence in that charity.

Trustees are reminded that when working with a third party fundraiser they must comply with specific legal requirements which apply when the third party fundraiser meets the definition of a professional fundraiser or commercial participator.

They must also ensure that the arrangement is set up and controlled in a way which is in the best interests of the charity, and which protects its assets and reputation.

Where a charity is entering fundraising arrangements with other third party fundraisers and these rules do not apply - for example, because the arrangement is between the third party fundraiser and a charity’s subsidiary trading company or they have been appointed in a genuine advisory or consultancy capacity - the Commission says it will expect the charity to operate with the same principles in mind.

David Holdsworth, chief operating officer at the Charity Commission, said: ‘We are aware of and concerned about a growing number of cases where arrangements are in place that appear to be set up in ways that deliberately avoid the statutory regulations.

‘These protections were put in place for the benefit of the public to ensure that fundraising is carried out in a way that is fair, open and transparent. These principles are ones we would reasonably expect any charity to agree with and try to meet in order to uphold the standards that the public, who give so generously to charity, expect.’

The Commission’s guidance Charity fundraising: a guide to trustee duties is here.