This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/money/2016/dec/22/hospice-charity-locked-into-fundraising-deal-that-misleads-public
The article has changed 4 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Hospice charity 'locked into fundraising deal that misleads public' Hospice charity 'locked into fundraising deal that misleads public' | |
| (3 days later) | |
| A hospice charity signed a deal with a direct marketing agency that could have resulted in hospices receiving less than 2% of £5.4m raised from the public, according to a Charity Commission report. | A hospice charity signed a deal with a direct marketing agency that could have resulted in hospices receiving less than 2% of £5.4m raised from the public, according to a Charity Commission report. |
| Hospice Aid UK agreed a seven-year deal with Piccadilly-based marketers Euro DM that resulted in the public being “misled” over how much money would be given to hospices. Since the Charity Commission stepped in, the agency has agreed to pay back £325,000. | Hospice Aid UK agreed a seven-year deal with Piccadilly-based marketers Euro DM that resulted in the public being “misled” over how much money would be given to hospices. Since the Charity Commission stepped in, the agency has agreed to pay back £325,000. |
| The case is likely to raise concerns about the fundraising strategies used by some charities, some of which result in high management costs. | The case is likely to raise concerns about the fundraising strategies used by some charities, some of which result in high management costs. |
| Hospice Aid UK was set up to raise money and then pass it on to hospices across the country. However, the Charity Commission began looking at the charity after it only passed on 1.9% of its income to hospices in 2012. In that year, the charity raised £132,023, but only made grants worth £2,557. | Hospice Aid UK was set up to raise money and then pass it on to hospices across the country. However, the Charity Commission began looking at the charity after it only passed on 1.9% of its income to hospices in 2012. In that year, the charity raised £132,023, but only made grants worth £2,557. |
| In the same year, Hospice Aid UK entered into the contract with Euro DM, which uses specialist direct marketing to target potential donors. Euro DM, which operates out of both London and Washington DC, boasts about its tactics on its website. | In the same year, Hospice Aid UK entered into the contract with Euro DM, which uses specialist direct marketing to target potential donors. Euro DM, which operates out of both London and Washington DC, boasts about its tactics on its website. |
| It lists a five-step programme, which starts with attracting “large members [sic] of new donors, using the latest direct marketing methods and techniques”. The donors’ loyalty is then consolidated “with proven relationship-building communications”. It then introduces donors to “regular and Gift Aid giving”. High-value donors are placed on “special development programmes”. | It lists a five-step programme, which starts with attracting “large members [sic] of new donors, using the latest direct marketing methods and techniques”. The donors’ loyalty is then consolidated “with proven relationship-building communications”. It then introduces donors to “regular and Gift Aid giving”. High-value donors are placed on “special development programmes”. |
| The final step is to identify “genuine legacy gift prospects and draw them towards this vital way of giving through a combination of education and promotion contracts.” | The final step is to identify “genuine legacy gift prospects and draw them towards this vital way of giving through a combination of education and promotion contracts.” |
| The donations have not so far reached the projected income. In 2014, Hospice Aid UK raised £537,211 and passed on 5.3% in grants. Last year, it raised £647,270 and passed on 4.7%. While the Institute of Fundraising says that it is not possible to give a general benchmark for return on investment “because there are so many factors that will vary year on year and organisation to organisation”, the Charity Commission said that the public was entitled to expect “a significantly higher proportion of donations” to reach Hospice Aid UK. | The donations have not so far reached the projected income. In 2014, Hospice Aid UK raised £537,211 and passed on 5.3% in grants. Last year, it raised £647,270 and passed on 4.7%. While the Institute of Fundraising says that it is not possible to give a general benchmark for return on investment “because there are so many factors that will vary year on year and organisation to organisation”, the Charity Commission said that the public was entitled to expect “a significantly higher proportion of donations” to reach Hospice Aid UK. |
| According to the report, the charity’s former trustees failed to take suitable legal advice before entering into the contract with the fundraising agency. | According to the report, the charity’s former trustees failed to take suitable legal advice before entering into the contract with the fundraising agency. |
| The contract then gave the charity “no practical means by which to terminate the agreement, which given it was for a duration of 7 years and it was intended to generate the principal source of income for the charity, was of particular concern”. The Charity Commission has now referred the case to the Fundraising Regulator. | The contract then gave the charity “no practical means by which to terminate the agreement, which given it was for a duration of 7 years and it was intended to generate the principal source of income for the charity, was of particular concern”. The Charity Commission has now referred the case to the Fundraising Regulator. |
| Hospice Aid UK said that its problems raising money effectively had begun after a second charity, the much larger Hospice UK, raised concerns about it about eight years ago, creating “reputational damage”. | Hospice Aid UK said that its problems raising money effectively had begun after a second charity, the much larger Hospice UK, raised concerns about it about eight years ago, creating “reputational damage”. |
| The British division of Euro DM is managed by Kim Way. Way said that the negative publicity around Hospice Aid UK had reduced its fundraising potential. “The solicitors who drafted our basic contract had extensive experience working with charities and we would hope they avoided provisions that would make it appear unfavourable to a charity,” she said. “They were particularly insistent on including a provision for termination should specific goals not be met.” | The British division of Euro DM is managed by Kim Way. Way said that the negative publicity around Hospice Aid UK had reduced its fundraising potential. “The solicitors who drafted our basic contract had extensive experience working with charities and we would hope they avoided provisions that would make it appear unfavourable to a charity,” she said. “They were particularly insistent on including a provision for termination should specific goals not be met.” |
| Way added that each contract was based on the needs and circumstances of the client and that Euro DM was confused that the Charity Commission had focused on their work. | Way added that each contract was based on the needs and circumstances of the client and that Euro DM was confused that the Charity Commission had focused on their work. |
| Michelle Russell, the director of investigations, monitoring and enforcement at the Charity Commission, said that the case was a clear reminder to all charities of the importance of their legal responsibilities when fundraising. “This is a case where we believe poor financial oversight and a failure to adequately control costs and overheads was an instrumental factor in the deteriorating financial position and where a fundraising arrangement was not only not in the charity’s best interests, [but meant] that the public believed more money was going to charitable causes than was the case.” | Michelle Russell, the director of investigations, monitoring and enforcement at the Charity Commission, said that the case was a clear reminder to all charities of the importance of their legal responsibilities when fundraising. “This is a case where we believe poor financial oversight and a failure to adequately control costs and overheads was an instrumental factor in the deteriorating financial position and where a fundraising arrangement was not only not in the charity’s best interests, [but meant] that the public believed more money was going to charitable causes than was the case.” |
| In a statement, Hospice Aid UK said that the contract with the fundraising agency “still has several years to run after which a judgment can be made.” | In a statement, Hospice Aid UK said that the contract with the fundraising agency “still has several years to run after which a judgment can be made.” |
| There have been several recent controversies over fundraising strategies used by charities, including selling of donors’ personal data to scamming companies and obtaining donations from vulnerable people using undue pressure. | There have been several recent controversies over fundraising strategies used by charities, including selling of donors’ personal data to scamming companies and obtaining donations from vulnerable people using undue pressure. |