Image source: Drift WordsA BBC investigation has revealed that millions of pounds donated to charities through ‘chuggers’ is not reaching the charities. Private fundraising companies that employ chuggers are paid by charities, and money donated by the public often covers only the companies’ charges.
BBC’s Newsnight contacted twenty leading charities who confirmed that they are effectively paying at least £100 for each signature the chuggers collect. Guide Dogs, Save the Children, Great Ormond Street and Amnesty are amongst those charities paying out millions of pounds a year to companies employing chuggers - with the result that those companies earn more than the charities raise.
The charities contacted by Newsnight agreed that their donors should be made aware of the costs of fundraising. Mike Aldrige, chief executive of the Professional Fundraising Regulatory Association, said:
“Some charities might be paying £50 or £60 per donor, some might be paying £100 or £120 or possibly even more.
“It may look to the outsider – to the uninformed outsider – as if all of their first-year donation is going to go to a third party but that's not the only way of looking at it.
“And in my view, and in the view of most charities, it is not the most transparent and constructive way of looking at it.”
Some of the charities involved in Newsnight’s investigation responded by pointing out that they carry out many fundraising activities, not just face-to-face, and that the costs are outweighed by the money raised overall. While some research suggests that over half of donors recruited by chuggers cancel their donations within a year, Guide Dogs and Save the Children said that face-to-face fundraising remains one of the most cost-effective ways of recruiting regular donors.
Betty McBride, Director of Policy and Communications at the British Heart Foundation, told Newsnight:
“'Over half of people signed up in this way begin a long term relationship with the charity.
“Their regular giving enables us to support vital long term activities such as heart research. This support is gold dust for us because it means we can plan our grant research programme.
“It’s a fantastic relationship based on trust. The initial investment pays off time and again and helps us to fight heart disease.
“Over a three year period, every £1 we spend on fundraising generates another £3 at least.”
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Comments
No business can make money without spending money and fundraising is no different.
The real danger behind this story is the perpetuation of a myth that charities run solely on the goodwill of free volunteers and should never spend any money on anything other than the good causes they support. Yes there is wastage in the sector but we need people educated about the reality many charities live in rather than the continuation of a misguided view many people have.
I must point out that your article above contains a very inaccurate sentence - 'with the result that those companies earn more than the charities raise' - this would hardly be described as the most 'cost-effective' manner of fundraising by charities, if it were in fact true.
Charities will pay about 1/4 of the amount they ultimately raise to these companies in a risk-free pay on receipt strategy. As someone involved in street fundraising management, I can assure you that these charges only just cover the cost of recruiting the donor and that there are no huge profits to be made.
This manner of giving has been a revolution for the charity sector and at a time when donations received from other sources are dropping off, all involved in the sector, whether in a voluntary or professional capacity should rally to protect our beneficiaries and support street and doorstep fundraising.
But the fact is @chugger there are profits to be made which is why commercial companies are in the fundraising business, so let's not pretend they're doing it for altruistic reasons. I totally get the need to invest funds to gain funds but what many people seem to object to is the way that many chuggers often have no connection with the charity concerned and appear to be primarily driven by commission. Charity is not the same as selling double glazing, people give because they feel passionate or care about a cause so I can see why many would object to news like this.
and fundraisers (the vast majority of which are not paid on a commission model), inspire people in greater number than any other way to get involved...
@chugger absolutely! Fundraising is one of the most popular volunteering activities, but volunteers and paid charity fundraisers are very different to chuggers which is the focus of this article...
Well, this is a very interesting article and comments.
The nephew of one of my friends is a chugger, and after 6 months without employment, the Job Centre pushed him into being a chugger. His aunt says the work isn't full time. For each assignment he has to undergo training about the charity, and mug up on it to answer any questions the public may have; and he doesn't get paid for that. Initially he was paid minimum wage, but he gets a huge bonus of £50 per direct debit donor over his daily target. The target increases each week, and his hourly rate goes up a bit.
It's clear from the comments that there are differing charging mechanisms.
Personally, I refuse to sign up with chuggers, as I prefer that the whole of my donation goes to a charity; and there is always a fear in mind that a criminal group could dress as chuggers, take my bank details, and it might be a long time before I found out that a direct debit had been taken by a non-charity, let alone have my identity stolen.
It would be nice to hear direct from chuggers what they think of the job, and how much they get paid.
I find this aversion to chuggers a bit weird. If we object to people making money out of charity fundraising, we should be targeting equal anger at ad agencies, newspapers, magazines, TV, internet ad providers... I'm sure the individuals behind these companies make a hell of a lot more money out of charity fundraising than some skint graduate who can't get any other work.
Charities aren't stupid - they know what fundraising methods are cost effective, and they wouldn't do this if it didn't work for them.
From my observations, lots of volunteers are not especially interested in this kind of traditional fundraising, and would much rather get involved in more creative ways to make money, such as putting on events or redesigning a website to increase donations.
It's pretty crap being a chugger - I was one for a few weeks when I left uni and it was quite demoralising, getting ignored and abused in the rain. Why would we want to make volunteers do that? I think it deserves payment.
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