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The regulatory shift that charities have been preparing for is now almost upon us. The new Code of Fundraising Practice ('the 2025 Code') will take effect on 1 November 2025, moving the sector decisively from prescriptive rules towards a principles-based framework.
For trustees who have not yet completed their implementation, urgent action is required.
This evolution represents a critical upgrade to the charity sector's defences against incidents that can shatter public trust, supported by practical guides on due diligence, documenting decisions, and monitoring partnerships.
The decade-long scam run by David Levi's gang, which stole over £500,000 while posing as Pudsey Bear collectors, remains a stark lesson in what happens when oversight fails. The 2025 Code will provide the tools to prevent such breaches, but it demands immediate attention for those still adapting their governance.
David Levi's gang operated for years using fake costumes and forged documentation, with less than 10% of collected funds reaching intended causes. This shocking breach of trust was made possible by insufficient systems to verify third-party collectors. The case exemplifies why the emphasis of the new 2025 Code on robust due diligence and ongoing monitoring is essential.
From the implementation date on 1 November, charities lacking comprehensive oversight of their fundraising partners may be exposed to similar risks. The Fundraising Regulator will almost certainly focus on how charities are implementing these principles in practice, not just on paper.
The new code: from rules to responsibility
The 2025 Code is approximately 45% shorter than its predecessor, replacing detailed rules with overarching principles that require professional judgement.
For trustees, the following key changes being introduced by the 2025 Code, demand immediate attention:
- Enhanced 'third-party oversight' requires active assurance that partners comply with the 2025 Code in practice. Those still relying on basic contractual agreements without robust monitoring processes must act now to strengthen their controls and procedures.
- Explicit 'trustee accountability' means that charity trustees can no longer claim ignorance about fundraising activities. Charity trustees collectively, must actively seek compliance assurance and review risks, with documentation evidencing their oversight.
- 'Documented decision-making' has become crucial in the principles-based system. Charities unable to demonstrate how decisions align with the new principles of the 2025 Code may well struggle in being able to demonstrate due diligence if challenged at a future date.
Action plan
If you and your fellow charity trustees are engaged in fundraising activities, here are a few key tips to consider:
- Conduct an immediate compliance review
- Prioritise high-risk third-party relationships
- Review and accelerate staff training; and
- Improve upon your governance reporting.
The Pudsey Bear scam demonstrated how quickly public trust can evaporate. Once the new 2025 Code comes into effect, charity trustees have both a responsibility and an opportunity to build more resilient fundraising practices. Those who have not yet completed their implementation should consider doing so as a matter of urgency—the regulatory landscape has fundamentally changed, and compliance is no longer optional.
The legal bedrock: codifying prudence in a principles-based era
This regulatory evolution must be understood not as a voluntary guideline but as the definitive standard against which trustee conduct will be measured. The 2025 Code attains a de facto obligatory status for all charities, irrespective of their registration with the Fundraising Regulator. It does so by establishing the contemporary benchmark for the 'prudent trustee' test, thereby becoming inextricably woven into the fabric of unequivocally obligatory law.
Charity trustees are governed by the venerable common law duty of care, historically articulated as the 'prudent man of business' principle. This is now codified in statute under Section 1(1) of the Charities Act 2011, which imposes a statutory duty of care upon trustees. While Schedule 1 of the Act does not explicitly mention "fundraising," it explicitly applies this duty to functions concerning the "safeguarding" and "application" of the charity's property. In legal and practical terms, a charity's funds, whether donated income or accrued assets, are its property.
Fundraising is the primary mechanism for acquiring this property, and its mismanagement directly leads to its loss, as the Pudsey Bear scandal starkly illustrated. Consequently, the duty to secure charity property is logically antecedent to the duty to acquire it responsibly. A failure to implement the core tenets of the 2025 Code, such as conducting robust due diligence on third-party partners, now constitutes a palpable risk of breaching this statutory duty. The 2025 Code provides the operational framework for meeting these legal obligations; to ignore its principles will risk both regulatory sanction and allegations of fiduciary failings.
For charities seeking to strengthen the robustness of their defences under the new 2025 Code, our exceptional Charities and Safeguarding team offers specialist compliance reviews and toolkits tailored to meeting the new duties with confidence. We have the experience to provide you and your fellow charity trustees with clear and practical guidance on the best and most robust governance framework to implement that will help significantly to protect the funding and reputation of your charity, vital assets of your organisation that require continual safeguarding.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
