The future of charity street fundraising – so-called chugging – has been thrown into doubt following the collapse of the UK’s largest face-to-face company, Gift Fundraising.
The practice is one of the most controversial marketing methods employed by charities with accusations that some companies have used aggressive sales techniques to sign up donors. Many local authorities have even set up special ‘zones’ where chuggers can operate.
Gift Fundraising went into administration late last week with the loss of nearly 350 jobs blaming “disappointing performance on the street, primarily over the winter period, which has seen an unexpected drop in results”.
Despite the move, some former clients of the company say they will seek a new agency although Gift Fundraising said: “Unfortunately this downturn was severe enough to cause serious financial pressure on the company and the directors are of the view that it would have been irresponsible to continue trading in this scenario.”
By taking action early, the board has ensured that any outstanding liabilities to clients will be met. The directors also emphasised that all fundraising staff have been paid for all their work to date.
Set up in 2001, Gift Fundraising is the oldest and largest street fundraising agency in the UK and has raised over £100m for its charity clients. Its collapse raises concerns that the future looks bleak for other operators, because, although charities seem willing to continue, the financial viability of the technique must be called into question.
But Dominic Will, joint managing director, described the administration as “a very difficult decision, but the right decision”. He added: “We remain of the opinion that street fundraising is a viable method of raising money and should be part of the fundraising mix.”
