Mistrust grows against Australia’s “charity muggers”

Mistrust amongst donors is growing as fundraising agencies are under fire for misspending donations and exploiting workers.

Actor and campaigner, Samuel Johnson, who was named Victoria Australian of the Year 2017 for his work with Charities, said donors should be wary of the money they donate to fundraising agencies, referring to “charity muggers” – or “chuggers” – as “snakes.”

“If you’re not prudent about how much you give, if you don’t know about the organisation you’re giving to, then I’d be pretty cynical about how much is ending up at the cause,” Johnson told Channel Nine’s Today Show on Monday.

This comes after “chuggers” won the first round of the class action against Appco Group Australia after the major fundraising agency was accused of exploiting agency workers who were often made to work gruelling hours well below the minimum wage.

The company makes its profits by taking a portion of charity donations collected directly from face-to-face fundraising techniques, but are paid on a 100 per cent commission basis. More than 1,400 claimants around the country allege that they were paid as little as $5 per hour for up to 80 hours per week to compensate.

Perveen Virdee, Appco Australia CEO, said: “We are entirely confident that we and our sub-contracted marketing companies operate responsible and compliant businesses and we will continue to vigorously defend ourselves in this case.”

Since October 2016, when the fundraising agency had the class action filed against them, questions of how much money is going to fundraising agencies and their employees and how little is going directly to Charities have soared.

“I want to confirm that we will continue to vigorously defend ourselves in this case and we remain confident that we have acted lawfully at all times,” Virdee said.

Appco is not the first fundraising agency under fire for wage underpayment. Sydney-based Mondial Fundraising was made to pay $770,000 to 824 workers who they underpaid between 2010 and 2016.

According to a report released last year by the Australian Competition and Consumer Commission (ACCC), 57 per cent of individual donors believe that their donations do not go towards any commission and reported that 81 per cent of Charities did not explain that any part of their donation would go towards the commission.

Fifty-three per cent of individual donors also indicated that they did not believe it was appropriate for donations to be used to pay for commissions.

According to the ACCC report, the number of Charities in Australia using face-to-face fundraising has soared from 20 in 2009 to around 100 in 2017. Over this same period, the number of agencies providing this technique has risen from 17 to 35.

In a move last year to salvage the Charity-donor relationship, the Australian Red Cross moved its third-party fundraising to an employment model so that the fundraisers were working on behalf of the organisation and receiving appropriate remuneration.

Kerren Morris, Head of Income Growth and Innovation at Red Cross Australia, said: “We wanted to make double sure that people who raise funds for our life-changing work get a day’s pay for a fair day’s work. In addition to guaranteeing worker’s legal entitlements, we’re also asking third party agencies to ensure the health, safety and welfare of employees and the highest standards of behaviour in all their dealings.”