Charities pull plug on 'cold-calling' for cash

A public backlash against being rung and asked for money is driving some charities to give up fundraising by phone.

CCS, the former Crippled Children's Society, has abandoned a scheme that sold diaries over the phone, the Child Cancer Foundation's northern division has stopped "cold-calling", and the Muscular Dystrophy Association is investigating a business franchise to replace phone canvassing.

Muscular Dystrophy chief executive Chris Smith said the association dropped its former telemarketing company, Wellington-based SDP Fundraising, last year because its phone fundraisers, who worked on commission, were too pushy.

"Someone would volunteer to give $5 and they would say, 'That's not enough. I would expect you to give at least $20 or $25'," he said.

"In the first week I was here, I fielded five complaints from the public about the way they were being asked for money.

"There is still a huge number of people who do donate, but the trend is downwards. I think the future is to move away from it because so many people are getting on the bandwagon," said Mr Smith.

Two former SDP workers complained to the Labour Department in 2003 that the company was breaking the minimum wage law by treating its workers as independent contractors, making some of them desperate for donations to earn an income.

The Employment Relations Authority is due to finally hear the case in August. Labour Department deputy secretary Graeme Buchanan said this week that the department's delay in dealing with it was "unacceptable".

Fundraising Institute president Carol Painter said the institute's code of ethics prohibited paying fundraisers on commission only.

"Anything that gets in the road of the person asking someone to donate to a cause, inasmuch as it may mean greater or lesser returns to the people doing the asking, we don't consider is good fundraising practice," she said.

But some charities still use commission-based phone canvassing. Like SDP, Auckland's Children at Risk Education (Care) Foundation treats its seven to 10 workers as independent contractors.

"We do that because if they do something wrong on the phone, they are independently liable for what they say," said chief executive Shaune Malloch. "They are paid on the amount of donations they make per night."

He said Care took a 70 per cent commission to cover its costs, leaving 30 per cent for the charities it supports - currently a first-time driver education project at Ardmore and the Youth Team Trust, which runs camps for young people expelled from schools.

The Wellington Kidney Society and the Wellington Asthma Society have both started using SDP in the past year since the company lost the Muscular Dystrophy account.

SDP managing director Arthur Sanford said losing Muscular Dystrophy had forced him to cut his workforce from a peak of 80 to seven.

He denied that his workers had told people $5 was "not enough".

"You have designated 0900 lines. They usually start at $10. In the case of Muscular Dystrophy it was $10, $15, $25, $30 and $50," he said. "Or they could send a cheque or money order for any sum of money.

"They can send 1c if they want to."

Mr Smith, who took over at Muscular Dystrophy last September, said revenue from phone fundraising had halved to about $450,000 this year since the business was shifted to Palmerston North company One For All, which pays its workers an hourly rate.

"SDP, to be truthful, were earning more money for us than One For All has, but I don't get any complaints and it's not bringing the Muscular Dystrophy Association into disrepute," he said.

The downturn has forced him to halve the staff in the association's national office from 10 to five, and he is now looking at obtaining the New Zealand franchise for a new product to replace revenue from phone fundraising.

CCS marketing manager Jo Bushe said her charity earned a gross $74,000 from selling 12,000 diaries in 2003, but ended its contract with Hamilton-based fundraisers Gemini Trust in February because the telemarketing business was no longer profitable.

Child Cancer Foundation fundraising manager Wayne McKenzie said it stopped phone fundraising last year because some people "were being approached in a manner that upset them".

Phone canvassing

Stopped
* CCS
* Child Cancer Foundation
* Muscular Dystrophy Association

Started - on commission
* Wellington Asthma Society
* Wellington Kidney Society

Continuing - on commission
* Children at Risk Education (Care) Foundation

Continuing - on wages
* Epilepsy Auckland/Southern Stars Trust
* National Kidney Foundation
* Safer Streets Trust