2 Mar 2015

Where do our charity donations go?

From Nine To Noon, 9:30 am on 2 March 2015

Eight col charity
Photo: 123RF.

The fundraisers who approach you on the street or come to your door are in most cases working for professional fundraising agencies. There are now ten third-party providers operating in New Zealand, many sending workers door knocking to elicit regular donations to a wide range of major charities and sporting organisations.

The biggest of those is Appco, which says worldwide it generates 40 billion dollars a month in donations for its charity clients. 

But how much of that actually goes to the charities?

Charities approached by Radio New Zealand, including Save the Children and Paralympics New Zealand told us that information is commercially sensitive. But they say the use of professional fundraisers is vital, as they do not have the volunteer base to raise that kind of money.

In Australia, the New South Wales Office of Liquor, Gaming and Racing (OLGR) has been investigating Appco after revelations that Special Olympics Australia only got 4 percent of the 12.2 million dollars Appco raised for it with a gift voucher programme.

Appco New Zealand won't say how much of a cut it takes of the money it generates for charities here. The Fundraisers Institute of New Zealand, of which it is a member, says it adheres to the international codes and standards of fundraising which do not endorse commission canvassing, but a fixed fee is met for each item sold.

Sue Chetwin of Consumer New Zealand said it is difficult to get to the bottom of what percentage the professional fundraisers get of charity donations, but Consumer has been told that in the first year the charity gets nothing, and all the money goes to the commercial operator. She said there is no way of proving this because the charities are not required to disclose how much they get from the money raised by those operators.

We've been running a "do not knock" campaign to stop scamsters and we received a 4 or 5 page letter from Appco saying we had to stop this immediately with a veiled threat at the end of it

The Chair of the Fundraising Institute of New Zealand, FINZ, Dennis McKinlay said when people sign up for monthly donations, averaged over four years 20 percent of that goes to the professional fundraising company. He would not drawn on how much the third provider gets in the first year. 

He said he can understand why there is some concern around third party providers, as there are now many more operators in New Zealand - 10 at last count.

More charities are starting to find this form of fundraising is effective, and so yes I think you will find more people coming door to door

A report by Horizon Research for the Department of Internal Affairs on public confidence in charities last year, found high levels of concern about the use of professional fundraisers.

77% of respondents said they were concerned about how much of their donation actually gets to the charity, and 81 percent saying they wanted the fundraising organisations to disclose how much of funds donated they keep.

Sue Chetwin and Dennis McKinlay discuss the issues with Kathryn Ryan on Nine to Noon.