Charities are bracing themselves for a new marketing backlash in the wake of Age UK’s controversial £6m deal with E.On after figures show the organisation’s commercial operations generate more than £110m a year.
With the sector still coming to terms with tougher rules on fundraising campaigns, third-party marketing deals could be the next battleground.
According to an analysis of its accounts, Age UK’s business activities earn twice as much as its fundraising. Among its tie-ups with over a dozen businesses, the charity took £21.9m in revenue after marketing Ageas home, travel and car cover to 500,000 customers and £9.4m for selling 21,000 plans offered by funeral firm Dignity.
However, it is not alone. According to a recent report by the Charity Finance Group, the Institute of Fundraising and PricewaterhouseCoopers 55% of charities have increased trading or social enterprise activity.
Age UK is already being investigated by the energy watchdog Ofgem for accepting £6m from E.On for allegedly pushing expensive energy tariffs to pensioners. Both parties deny wrongdoing.
Defending its commercial deals, an Age UK spokesman said: “We are completely open that profits from our social enterprise support Age UK’s charitable work. We carefully design and select products and services to ensure they are appropriate for older people and we have very high levels of customer satisfaction.”
The move coincides with a new report which shows nearly half of all smaller charities have not even heard of Sir Stuart Etherington’s review of fundraising regulation.
Published by the Institute of Fundraising and the Small Charities Coalition, the research was carried out in response to concerns that the views of small charities would not be heard in debates about the changes.
Official figures show there are more than 150,000 registered small charities in England and Wales.
Charity probe reveals blatant disregard of data laws
Charities escape legal threat in last chance saloon
Charities to lose £5bn a year, says REaD group study
Grade becomes charity enforcer but critics fume
Graham slams ‘confusing’ charity preference service