The booming business of charity

JIM CHIPP

Some local charity supporters may be surprised to learn how much of their donations end up in private Australian hands.

Hutt News has learned that one fundraising company charges charities 80 to 90 per cent of the first year's donations and its fee is paid up front.

Brisbane-based Cornucopia Fundraising employs people on New Zealand streets to ask passers-by for monthly donations for various charities and in the last fortnight they have been active in the Wellington region on behalf of New Zealand Red Cross.

Fundraisers worked in Lower Hutt, Petone, Wellington, Porirua, Wainuiomata and Paraparaumu.

They were notably camera-shy when we attempted to photograph them.

In job advertisements, the fundraisers are offered the chance to earn from $750 to $1500 a week.

Cornucopia director Gregor Drugowitsch emailed a response to Hutt News' questions from Brisbane.

He said Cornucopia employed 25 fundraisers in New Zealand on behalf of the Fred Hollows Foundation, Oxfam, IHC and New Zealand Red Cross.

Fundraisers were engaged as employees or contractors, with various different payment structures, including hourly rates and performance-related pay.

How much they were paid varied depending on overall success in signing up supporters, donor feedback, cancellation rates and lengths of service, and the most successful fundraisers were regularly taken overseas to see the charities' work to keep them motivated and inspired.

Red Cross Project Partners manager Kalimar Donvin-Irons said Cornucopia's fee was 80 per cent of the donor's contributions in the first year, or almost 10 months' payments.

Ms Donvin-Irons said Cornucopia had been fund-raising for Red Cross for 10 years and the programme generates millions of dollars each year for its work.

Part of the fee is paid as an immediate lump sum and the rest as a portion of the first year's donations.

Oxfam spokesman Jason Garman said Oxfam paid Cornucopia an up-front fee for signing up each pledge, equating to 22.5 per cent of the total expected paymentsduring the four-year period the average donor contributed.

That equates to 90 per cent of the first year's donations, and the fee was paid within four months of the donor signing up.

"Regular donors are crucial for Oxfam to bring lasting change to poor communities.

"They enable us to plan ahead and deliver effective development programmes through having a predictable funding stream."

Donors were offered options of 70 cents per day, $1 per day and $1.67 per day, and they were free to cancel contributions any time.

When professional fundraising appeared in New Zealand, a number of charities, including Red Cross and Oxfam set up the Public Fundraising Regulatory Association.

Association manager Karen Ward said it is a self regulatory body with a very strict code of conduct.

"We don't have knowledge of particular contracts.

"We have a disclosure statement and that is very transparent on the pledge form."

The association's code of conduct required pledge documents to contain a disclosure statement that the average cost to charities - the amount paid to the fundraising company - should be about 20 per cent of the average contribution, but did not prescribe how or when it should be paid.

Face-to-face fundraising is the most cost-effective method of raising awareness and also creates a continuing relationship for four or five years but it has costs, as do all forms of fundraising, she said.

"We sometimes forget that this fundraising allows these charities to achieve some amazing results across many deserving causes."

Ms Ward said the association also co-ordinated with city councils to roster the member charities' activities in Wellington, Auckland and Hamilton.

It asked the councils to make membership of the association compulsory for all face-to-face fundraisers working in the cities.

Wellington City Council spokesman Richard MacLean said the council does not have the power to do that, but officers dealt with the association regularly to co- ordinate fundraising activities.

Staff occasionally had to move fundraisers along when their activities obstructed narrow sections of footpath or zebra crossings, or blocked business entrances. - by Jim Chipp

- Hutt News