A chugging fiasco?

Last week Stephen Bubb, chief executive of acevo, berated 50 of his members – the bosses of top fundraising charities – for failing to appear on Newsnight. The flagship BBC 2 news programme had criticised the practice of face-to-face fundraising, or “chugging”.

The core of Newsnight’s criticism  was simply that charities paid too much money to the agencies used for such fundraising – often more than £100 per sign-up. Newsnight reported that these fees “effectively wipe out the amount a person gives”, particularly as many donors cancel their direct debit commitments within the first year.

Bubb is right to take sector CEOs to task on the issue. If face-to-face fundraising is defensible in its current form, we should defend it. All the more so when street fundraisers have, through their prevalence in busy urban areas, effectively become the most visible face of many fundraising charities. When the practice is subject to such a high-profile attack, a clear and coherent response should be ready.

My near namesake, Mick Aldridge, who runs the PFRA – the self-regulatory body for street fundraisers, takes the role of a “chuggers’ champion” on these occasions, and works to provide such a response. He robustly dismissed Newsnight’s line as that of an “uninformed outsider”, and later the PFRA said it “expected more from a programme previously held up as a bastion of balance and credibility.” Yet the key umbrella bodies and major charities seem at best reluctant to engage in the debate. Why are others in the sector so slow to support Mick on the issue?

Part of the reason may be recognition that many people have been irritated by the persistence and prevalence of street fundraisers, and sector leaders do not want to associate themselves too closely with those experiences. If true, this is short-sighted: charities are already associated with street fundraising. They clearly make efforts to ensure the quality and integrity of the practice (through the PFRA, for example) and must be prepared to defend it. If in fact chugging needs to adopt a less intrusive style to avoid alienating large swathes of the public, then charity leaders should at least embrace the debate.

A more interesting reason may be that chugging sits squarely between two irreconcilable and widespread beliefs about the sector. On the one hand, charities are endlessly told to become more business-like, judging themselves (and those they pay for services) on results delivered rather than good intentions. Chugging is an excellent example of charities doing just that – paying highly-skilled, specialist agencies in exact proportion to the results they deliver. One can argue over the prices, given high attrition rates, but reasonable competition exists within the sector, and charities generally remain satisfied with the results. A more subtle objection is that payment by results, in this particular case, creates a perverse incentive for insistent behaviour that may not be in the charities’ long-term best interests.

On the other hand, some believe (with Newsnight) that charities must not behave like businesses at all. The programme’s indignation at the “millions” made by fundraising agencies is – as Mick points out – a knee-jerk response unworthy of an analytical programme. A sector of this size clearly pays millions to all sorts of industries that do not exist for the public benefit. Many millions go the way of newspapers and search engines, to utility companies and transport agencies, and to banks and money-changers. Is spending money on fundraising any more outrageous than this?

British fundraisers generate close to £10bn per year in income for good causes. Most people only give money to charity when prompted in some way. The prompting – whether through the media or directly, costs money, and it takes significant spending to generate billions.

I was reminded of a focus group for older people run by nfpSynergy, the sector research consultancy. The subjects railed against supposedly high salaries in charities, since they drove up operating costs and reduced the money “spent on the cause”. Yet they preferred to hear from charities through (colossally expensive) adverts on mainstream TV channels. What’s the difference between this kind of expenditure and the fees to street fundraising agencies?

The only real difference lies in the immediate causal relationship between the donation and the payment to the agency. Psychologically speaking, many donors give through charities, rather than to them. They want to support causes, not organisational infrastructure. Their gifts need to be treated with respect and reverence, and directed carefully towards the beneficiaries most in need.

But the system of payments by results, while immensely “businesslike”, undercuts this principle and risks packaging the donation as a commercial transaction, secured by salespeople on commission. It is very difficult for a donor to separate their donation from the agency’s fees in the way that Mick Aldridge advocates. The close connection makes donors uncomfortable about the practice, and supports the Newsnight narrative that people wouldn’t sign up if aware of the costs.

Parallels exist in the world of online fundraising. Many fundraising websites charge charities through up-front fees and flat-rate subscriptions, while others take money in proportion to the income they generate for the charity. While the latter is arguably more businesslike for the charity, the former has the benefit of leaving the donors’ money “intact”.

Personally, I cannot see that any programme of education will change the public perception that their donations should go to causes, rather than the agencies that enable fundraising. We must nevertheless make donors more aware that fundraising always costs money, and without this expenditure the sector would not be able to deliver the huge public benefit it currently achieves. Otherwise, the future will lie in isolating and disguising the costs of fundraising from the public, which will only generate more work, and indignation, for news journalists.

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3 Responses to A chugging fiasco?

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  3. Mel Schelle says:

    Fundraising through various activities as sales, silent auctions, walk-a-thons, races, or entertainment events is a popular revenue generator for charitable and non-profit organizations. However, quite a few obstacles exist in the pursuit of running a successful fundraiser, including lacking or overworked volunteers, limited payment methods, limited reach, and overall process inefficiencies.–

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