Charities must make clear from the outset who will benefit from a donor’s gift, new regulatory guidance on child sponsorship marketing has urged.

The Fundraising Regulator has published new guidance on child sponsorship marketing to ensure fundraisers are clear about where donor money goes and who benefits from the funds.

Some sponsorships directly benefit an individual child by providing school supplies, for example, while others contribute to wider projects that support many children.

Last year, the poverty relief charity Penny Appeal committed five breaches of the Code of Fundraising Practice, including misleading donors in two of its child sponsorship appeals, the regulator found.

The new guidance says that if a child sponsorship programme holds wider community benefits this should be made clear at the earliest opportunity.

This includes community sponsorship models, which do not give the donor-selected child direct, personal and exclusive benefit; instead, they benefit from a wider pool of money collected for their community or project.

“Reference to the community benefit must be immediately clear and prominent, for example in the headline or subheading of a marketing communication,” the regulator said.

“Clarity, in broad terms, about the type of child sponsorship and how the money will be used should be given to the donor before or alongside a ‘donate now’ button.”

The regulator said if a child sponsorship programme is exclusively a direct sponsorship model, meaning there is a direct link between the donor’s money and an individual child, and can be evidenced, then a headline of ‘child sponsorship’ would not mislead donors.

Before a donation is made, charities must provide a donor with information about the project or scheme they have selected and how the money will be used, unless a general fund is involved, the regulator said.

“Charitable institutions must explain what happens to a donor’s continued sponsorship if the child they were nominally sponsoring were to reach a particular age, leave a project, the charity withdraws its support or the child dies,” it added.

The Fundraising Regulator’s research found some charities were not meeting the standards set out in the code relating to child sponsorship marketing. Some issues included unclear information about how sponsorships were structured and how funds were allocated.

“These oversights risk causing confusion or even eroding public trust,” Russell Brown, regulatory projects manager at the regulator, said in a blog post.

Input was sought from the Advertising Standards Authority, to ensure that any guidance produced would support compliance with the self-regulatory body’s codes, and workshops were held with charities using this fundraising method, he said.

“The focus was on providing simple, straightforward ways to improve marketing practices.

“This included the need to make it immediately clear whether a sponsorship supports a single child or delivers a wider community benefit.”

The guidance is not solely about compliance but building stronger relationships with supporters by being open and honest, Brown said.