Professional fundraising agencies

The issue I want to touch on this time is the use of the professional fundraising agencies by not-for-profit organisations running charity collections. I have long considered the practice dodgy and, ultimately, counter-productive.

The point raised by commercial money collectors is that employing professionals is ok because, from the point of view of a charity involved, this is the money they would otherwise not be able to haul in for lack of volunteers, resources, time, admin etc. In essence they say that the choice is between getting something and getting nothing, so getting something wins hands down. I completely disagree.

In my view the pool of money available for charity in New Zealand (or any other country for that matter) is limited. It cannot be grown by much using professional marketing techniques employed by fundraising agencies. What will happen is that someone persuaded by a cold-caller to donate to say Oxfam will then not give to the Sallies at a traffic lights collection. Our budgets are limited and if we spend more somewhere we have to cut down spending in another area. So, essentially, the same pool of money will get divvied up differently. Charities employing efficient and aggressive fundraising agencies will attract more donations. Other charities, mainly those relying exclusively on volunteer effort, will get less. So maybe this is a zero sum game in which Oxfam gains what Sallies lose? Again, I disagree

Because of the involvement of a professional fundraising agency much of the money collected will not flow to the target charities at all but will instead cover the collection fees. Based on the linked article, some agencies keep the entire first-year collection from regular donors. Based on a 5 years collection cycle this amounts to 20% but of course peoples’ circumstances change and not many keep donating for full 5 years. If they stop payments within the first year ALL money collected will end up with the fundraising agency. This is disgraceful. I believe that, at the very least, the agency fee structure should be disclosed to  potential donors. As in “please be aware that the first year’s collections go to pay our fees so if you decide to stop donating within 12 months Oxfam will not see a cent”.


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