Giving chuggers the elbow - why face-to-face fundraising in Edinburgh is a bad thing

This article was started a couple of months ago, but I have been prompted to complete it after today’s  Edinburgh Evening News report that centre management company Essential Edinburgh has introduced new rules to control chugging:

“They will have to ensure they never say or do anything that could pressurise or harass people, and tell anyone who agrees to make a donation that they are being paid to collect for charity.”

Chugging (or face-to-face fundraising to use the correct term) is something that I dislike as a member of the public, as a fundraising professional, and as a chief officer in the voluntary sector.

Why I don't like chugging:

1. It makes no money. 
The only way to make money is to take the donors recruited through chugging and try to extract more money from them later on. This misleads donors into signing up because “its only £3 per month”. It can't be if charities are to make any money from it.

Donor recruitment costs
From Third Force News. Issue 629, 1st April 2011

Charities pay tens of millions of pounds every year to subcontracted firms who sign people up to direct debits on the street or doorstep and while chuggers, as they have become known, are both loved and loathed in equal measure, the rewards can be plenty: last year 750,000 people signed on the dotted line, giving an average contribution of £90 a year.
Figures show smaller charities are increasingly turning to face-to-face fundraising as a way to generate cash in the downturn.
According to the Professional Fundraising Regulatory Association (PFRA) - set up by charities to monitor face-to-face fundraising - on average, the companies behind the collections are getting between £80 and £160 per donor they sign up.
Mick Aldridge, the PFRA's chief executive said: "Some charities might be paying £50 or £60 per donor, some might be paying £100 or £120 or possibly even more."
"It may look to the outsider - to the uninformed outsider - as if all their first-year donation is going to go to a third party but thats not the only way of looking at it," he said.

The problem is that chugging is a bit like the emperors new clothes. I am not an uninformed outsider, but because I disagree with it my opinion will no doubt be branded as “uninformed” along with anyone else who points at the naked man striding down the street.

Attrition rates
The attrition rate (number of donors dropping out) in the first year is very high. Between 33% and 58 % of donors recruited in this way will cancel their direct debit within twelve months.

According to an article in Civil Society magazine:

Donors recruited by face-to-face fundraising are dropping off at higher rates than in the recent past, according to the latest figures. The 2009 PFRA Attrition Survey, released today, expects that between 55 and 58 per cent of donors recruited in 2008 via street fundraisers will have cancelled their donation within 12 months. This marks a significant increase from the 2008 Attrition Survey which showed that in 2006 the average street fundraising attrition rate was 49 per cent.

A recent report from the PFRA states:

The 2010 instalment of the annual survey – which has previously been run in 2008 and 2009 – shows that attrition of doorstep-recruited donors after five months of 2009 stands at 30.5 per cent. Previous DARS have covered campaigns run in 2004 and 2006-08 inclusive. Average attrition in all previous years after five months was around 33 per cent.*  (In other words, 33 per cent of people who made a first payment had cancelled their Direct Debit after three months.)
“If this trend continues for the rest of the year, we should see doorstep attrition come in at around 44 or 45 per cent, which would represent our best year since we began our analysis, as most years have returned annual attrition levels of 48-50 per cent,” says Rupert Tappin, managing director of Future Fundraising who, along with Morag Fleming of Scottish social care charity Quarriers, co-devised DARS.

Although some face-to-face fundraising contractors will provide partial discounts on recruitment costs to compensate charities for donors who drop out their self regulatory body the PFRA is now complaining  that other types of fundraising don’t have to publish their attrition rates which makes chugging look bad. This argument is daft. Even if every other type of donor recruitment had equal or worse attrition rates, this would not vindicate chugging.

Donor servicing costs
You may be giving £3 per month, but it may be costing £2 to hold your details on a database, process your monthly direct debit and write to you.

So why do charities get involved with face-to-face fundraising? Its partly because they feel that all their competitors are doing it and partly because at face value (or presentation) it does look like an "investment", but by the time the true outcomes are known the headquarters fundraising staff who set up these schemes are unlikely to atill be in post.

2. It is a betrayal of the the voluntary sector's values of equality and inclusion. 
You will never see an old, ugly or disabled chugger. If there are any they are the tiny exception to the rule.

A typical chugger recruitment ad

3. Chuggers target the same people over and over again.
The people walking down Princes Street and Rose Street are largely the same people every day of the week. Is it any wonder people get fed up being approached by chuggers?

4. It is often aggressive, or persistent beyond the point where I have said no. 
Last week I was approached by a chugger and put my hand up and said "no thankyou". He pursued me down the street. Yes UNICEF, this was you (and I am not the only person raising specific concerns about UNICEF’s activities in Edinburgh).

5. It makes all charities look bad.
Regardless of whether they do face-to-face fundraising themselves, all charities come out badly from chugging because the only regular contact most people will have with a charity is either going into a charity shop or meeting chuggers.

In conclusion, charities survived before the smoke and mirrors of face-to-face fundraising and they would survive if it was banned entirely. The money spent on it would not go unspent in fundraising budgets. It would be for other, less obnoxious, forms of fundraising. Its time that local authorities and the public in general gave chuggers the elbow.

Update: 9th August 2012
The Sunday Telegraph recently did an undercover investigation into chugging which is worth a read:

• 'Chugging': a high street fundraiser's diary
• Undercover video
• 'Chugging' kingpins paid themselves £1.2m in just three years
• Fundraisers can be aggressive and intimidating, says report

The Bradbury Foundation

The Bradbury Foundation is Hong Kong’s largest charitable trust.

The Foundation, based in Hong Kong, is a grant making trust that was established by Mr Bertram Walter Bradbury known as “Bertie” (and in Chinese as Bai Puli). Born in 1888 in Shropshire he was a Master Butcher who emigrated to live in Hong Kong. Originally working for the Hong Kong Milk Company he founded his own business, initially in the printing industry and then in the property and stock markets. He was a well liked person, owned the first television in Hong Kong, skinned the last tiger in the colony and had a close affinity with the Salvation Army. During the Japanese invasion of China (1942-45) Mr Bradbury was interred in Stanley Camp, Hong Kong.

In the early 1960s he set up a trust fund to help British charities that assist the elderly and disadvantaged in Hong Kong and the UK. On his death in 1970 his considerable fortune was committed to the work of the Bradbury Foundation. Many institutions and Schools in Hong Kong are named “Bradbury” as a result of funding from the foundation. The foundation banks with HSBC.

The trustees meet once per year in November and consider applications put forward by their country representatives. The UK representative was, for a long time, Dennis Minns. Their current UK representative is Hugh Inman.

At date of writing the trustees are following a five year plan. The foundation's four main themes during this period are believed to be: The Salvation Army, The Red Cross, the elderly and the blind. They are not funding anything which falls outside of these themes. In addition, due to the current financial crisis, the Bradbury Foundation no longer funds multi-purpose community centres. Previously this was one of their main areas of support. Funding for UK based organisations is now restricted to England and Wales. They have stopped funding projects in Scotland.

This article has been put here to provide further background on this rather mysterious, but often talked about,  trust.

I am not in a position to provide any further contact details so please don't ask!

This article (c) 2010 Gordon Hudson MinstF

Professional fundraisers and charity trustees.

 [This article, by me, originally appeared on the Institute of Fundraising trusts special interest group mailing list].

Fundraising is a bit like teaching. Everyone has been to school so they think they are an expert on teaching. Everyone has put a coin in a collecting tin so they think they are an expert on fundraising. Like the trustee who insisted that a particular small community event could easily make £10,000 profit if only I ran it properly…

My experience is that trustees of small and medium size charities prefer:

1. Capital appeals (easier to understand than complex revenue funding packagesand results in something physical that they can point to in the future).
2. Events (that they can be seen at, but that don't necessarily make any money).Even if this is at the expense of revenue fundraising. 

and

1. Expect returns on investment which are higher than those which would be expected by larger charities. 
2. Are usually opposed to professionalizing the presentation of the organisation even if that costs no more than is currently being spent.

The root of this seems to be a fear of personal social exposure. They do not want to meet someone socially who knows they are a trustee of the charity and mentions it to them. The best example of this is the chairman of a charity I used to work for who, when we were recruiting celebrity patrons, said "I don't think we want any of those vaudeville types involved". He meant that he didn't want to be embarrassed by certain celebs involvement in the charity because they were not his kind of people even if they would be beneficial to the charity. The same chairman also told me that I was making too much of our case for funding and that we were simply not as important a cause as some of the bigger charities in our field. That’s a personal embarrassed issue too. People were mentioning it to him because we were getting more publicity. 

Trustees also feel a bit guilty sometimes for not helping fundraisers. For example, they sometimes think they have influence with people or organisations, but then find that when they try to use that influence that they don't really have it. If that happens once its unlikely that trustee will try and help again.

A lot of trustees in smaller charities are retired pubic sector executives who got where they got by being Teflon coated. They won't risk getting involved in things which might have a negative outcome. They don't know they behave like this, its just part of their "being".

The best situation any fundraiser can hope for is trustees who do nothing to help, but don't obstruct their work either.

New blog about Fundraising

This just a short note to say that I have set up a new blog solely to deal with my professional life in fundraising, marketing and voluntary sector management at http://www.gordonhudson.com

This should not have any effect on my existing blog as the new one is mainly comments on news stories covering fundraising and charity issues.

The new blog is hosted by Blogger (free of charge) and uses their  custom domain feature although the domain is registered through Blacknight rather than Google/Blogger. It also utilises the new Blogger static pages feature which allows up to ten static web pages for other non blog information. Its surprisingly good. Blogger now also has a version of Google Analytics built into it (currently only accessible through "Blogger in draft").

Total cost of setting up the new blog £0 as I already owned the domain name (less than £10 to buy if you don't already have one.

The risk of Direct Payment to Charities and Voluntary Organisations in Edinburgh

I hear that the City of Edinburgh Council is intending to move away from providing block grants to charities for the provision of services. For those readers who are not initiated into the world of voluntary sector funding the council gives money to charities to provide services in the fields of social care, children and families. The amounts of money given are usually very far short of the total cost of running the service and the organisations make up the rest through fundraising - usually providing a higher standard of care than what would be possible if the council was running the service.

Direct payment differs by making the payments to the users of the service which they then use to buy services from charities, the council themselves or private sector providers. This is supposed to improve choice for service users, but in reality it saves money for the council because not all of those personal budgets will be spent and if a service user does not pay their "bill" to the charity there is no way this will ever be pursued for payment. The council is obviously very keen on this method of funding, but it presents a couple of quite significant problems that are not obvious unless you have experience of fundraising or financial management:

1. Instead of having one customer (the council) organisations will now potentially hundreds of customers who will have to be set up in the organisations accounting system, sent invoices, tracked to make sure they are paid up to date and chased for non payment (in sofar as this is possible). This skews the market in favour of larger organisations who have the financial management infrastructure to administer it and income from other sources to pay for such a system (the council will not be interested in funding the admin costs).
2. Service users who are cognitively impaired and reliant on full time carers (e.g. people with dementia) will have to have their payments administered by a carer who may not have the skills themselves to handle payments to the many service providers they may be using.
3. The biggest problem of all is the financial insecurity which this brings. With a fixed grant system its possible to approach other funders (charitable trusts, individuals and companies) for the additonal money required to run the service They in turn can have confidence in the organisations ability to deliver the service because a certain amount has already been confirmed by the council. Without this confidence the success rate of funding applications will be a magnitude lower. My guess is that half of my own organisations larger voluntary funders only support us because we have some guaranteed money in the form of a council grant.

The real question is does the City of Edinburgh Council realise that these issues exist or are they just willing to make a switch to direct payment as a way of saving money now and deal with the problems later?

Mysterious charity direct mail from Children 1st

I had a bit of a blast from the past this week when I received a redirected direct mail shot from the charity Children 1st which had been delivered to an old address. Addressed to "Dear Children 1st Loyal Supporter" it appears that they are facing a funding deficit of £1M this year.

This is not surprising given all the local authority funding cuts, and the fact that Children 1st is always in an embattled position against its English equivalent the NSPCC. The NSPCC increasingly expanding its fundraising operations in Scotland (where it provides apparently no services other than Childline which was a separate charity with its own respected fundraising department in Glasgow prior to being taken over by the NSPCC).

However, thats not the mystery. You see I am not a loyal Children 1st supporter at all. Way back in 1994 I was working closely with a fundraising consultant called James Tysoe who had run the Edinburgh Sick Kids appeal. He hired me to work on a project with him at the youth charity Fairbridge and from there I went to work on the relaunch of the RSSPCC as Children 1st. It was actually quite an unhappy time and we had a serious falling out, which I am glad to say we patched up later on. Part of my job at Children 1st was working on the installation of a fundraising database system called ALMS. In common with many projects I have worked on I put myself in the database as a test entry. There are two reasons for doing this. It gives you an entry you can play with without the risk of losing real donor data and it gives you a check on the delivery of direct mail: if you don't receive a copy of each mailing at home then you can investigate the delivery problem as it might be more widespread.

Since 1994 I have received very few mailings from them. A few at the time of the initial campaign, but maybe only one since then and I think I sent them a donation as a result, but that's probably more than ten years ago, until this one arrived totally out of the blue. Its an interesting story. Now I need to write to them and make sure they don't send me any more.

An aside:

An additional observation about the mailing is that the supplied freepost envelope says on it "no stamp needed butusing one will save our costs". This actually isn't true unless you also obliterate the FREEPOST RSGE-ZGBB-XXXX line, unless Children 1st have managed to get some sort of special arrangement with the Royal Mail. I was surprised they were not using the fractionally more epensive freepost service which does not require that code line.

Are the training courses provided by the Institute of Fundraising worth going to?

Hardly a week goes by without me getting a physical mailing or an email alert about fundraising from my professional body the Institute of Fundraising. I have been a member of the Institute since the early 1990's and until recently there was very little training in Scotland other than the very worthwhile Scottish conference which is like a training and networking boot camp combined with a last night party/booze up.

The courses run in London do seem quite appealing and I have this nagging feeling that I should try and go to some of them, but to be honest my charity has precious little money for those sort of trips. I could get the money to go, but I would feel guilty, especially as I need my budget for other fundraising purposes like leaflets, mailings and posters which have a direct impact on the bottom line.

One of my ambivalences about the Institute of Fundraising courses is that they seem to enthusiastically present fundraising ideas which have worked very well for large charities. In my experience these don't often work as well for smaller or regional organisations. Take social media as an example. My charity has benefited greatly from its involvement in Twitter and Facebook. Facebook especially because we have overseas supporters who are able to interact with us through our Facebook page. But, we only get people joining our Facebook page who we already have contact with through our web site or as members or donors.

Many of the subjects I see being promoted as training courses are in this vein and not likely to make much of an impact on fundraising in smaller organisations. Small charities just don't have the brand appeal to attract casual support. Even if a larger organisation did very well from something this is no guarantee it will work for you, and it might mislead you into investing in something which is doomed to failure, making it more difficult for you to be innovative in the future.

Thats my opinion for what its worth. Please leave a comment with your own views.