A strolling accordionist plays a rousing Scottish air among the giant cardboard cactuses … waiters in convict garb pour the cabernet and chardonnay … ladies in leis ladle out tacos and dim sim … and Michael G. Downes surveys the multicultural carnival and declares: “The only thing better than a recession for our business is a war.”
His business is the business of giving – nothing as vulgar as fundraising for charity. Michael G. Downes Venn and Associates prefer to call themselves”consultants to the NFP (Not For Profit) sector” and they never actually touch the money, discreetly billing their services by the hour “in the same way as lawyers or accountants”.
Michael Downes and his colleagues are here under the banners, bopping to the band in the great echoing vault of the Canberra Convention Centre on a balmy Sunday night, to try to persuade delegates to The Australian Institute of Fundraising’s (TAIF) annual conference that their special computer program/telemarketing scheme/direct mail list or what have you is the way to raise more money for their school or soup kitchen, their orphanage in Calcutta or their positive emission tomography facility in Melbourne.
Twenty years ago there was no TAIF, no conference, and fundraising in Australia was mainly confined to chook raffles, passing the plate at Sunday services, Salvos selling the War Cry in the pub (remember how avidly the punters used to try to decode the biblical “Tip for the Race of Life”?) and the occasional eccentric widow leaving the lot to a cats’ home.
Last year, the best estimate is that the public gave about $3.5 billion -that’s more than double the entire annual budget of the State of Tasmania – to charitable causes, and nearly $1 billion of this was spent on”administration”, which includes the salaries paid to the fund-raisers, and the handsome fees charged by outside professionals like Downes Venn.
That Sunday night a fortnight ago, and for the following three days, 666 delegates from all over Australia and half a dozen other countries attended lectures on things like “Cultivation”, “The Big Ask Part One”, “The Philosophy of Institutional Advancement in Education” and “Using Archives to Advantage”. They are, or would like to think of themselves as, the fastest growing group of professionals in the country … the first university course (DD, Doctor of Donations?) is starting soon in Sydney.
Who are they? “Quite simply, the facilitators of dreams,” blurbed the conference press release. There were young women in power shoulders from the Red Cross, middle-aged gents from the Salvation Army conspicuously sticking to the orange juice, chaps in suits from college campuses, and even the odd beard, presumably the foreign aid contingent. The fund-raiser from Vassar was chatting to the organ donor expert from Singapore, while Antoine Vaccaro showed off his PhD in “non-profit management” from the Universite de Dauphine in Paris.
No char … oops … non-profit organisation was too large or too small to be represented at this conference, which cost about $1,500 for each delegate, more than $1 million in total. The Wilderness Society was there, alongside the NSW Spastic Centre; Musica Viva rubbed shoulders with the representative from the Rangi Ruri Girls’ School; Lifeline was there, along with Austcare, the Cystic Fibrosis Foundation, Launceston Christian Broadcasters Inc and the Old Fintonians Association.
By day, they thronged the multi-tiered lecture theatres, listening to people like J. Patrick Ryan, secretary of the World Fundraising Council. Mr Ryan is a former “development director” (TAIF-speak for fund-raiser) for the Catholic Archdiocese of Cincinnati, and happens to be Michael Downes’s international partner in what they claim is the world’s biggest fundraising consultancy, Downes Ryan, which they say raises enough money worldwide to rank in the Fortune Top 500 – more than $500 million a year.
The audience sits whispering as the silvering, slow-spoken Mr Ryan addresses his keynote speech to the question: “Who Gives, and Why?” He tells them tales of the world’s great charity benefactors, of the 35 members of the Chicago Museum of Modern Art who between them raised $42 million (murmur of disbelief). Of the woman honoured by the Red Cross (or was it the NSPCC?) for donating money every year for 35 years (hum of approval). Honeyed cliches like”making the world a better place”, “noble task”, “personal commitment”, “uplifting”, “healing” and “mission”, drip from his lips. He’s like Jimmy Swaggart on Valium, someone mutters.
In between sessions, the delegates attend a masked Carnivale ball, laugh at entertainer Campbell McComas, and travel by bus to Gold Creek, a property where they munch on barbecued chops while singing “We ain’t got a barrel of money/ Maybe we’re ragged and funny” etc. The irony is, no-one sees the irony of spending $1 million to learn how to raise $1 million.
And hoping to catch their eye between sessions are the people from Downes Venn and 30 other organisations which have set up their stalls around the foyer, the biggest alms fair Australia has ever seen.
“This is all information which is on the public record,” says the man from Dun and Bradstreet, a mite defensively. Mark Curtis, the company’s sales manager, is hoping to attract the charity carriage trade to his stall in the middle of the foyer.
And, if you are planning a mass mail-drop, has he got a deal for you: the names and home addresses of every company director in Australia, all 128,394 of them, broken down by location, by sex, by occupation if you so desire. And all for a mere $165 per 1,000 names … such a bargain that already, two fundraising organisations, Endeavour in Queensland and the delightfully-named Philanthropy Marketing in NSW, have bought the complete list, at a cost of around $25,000.
The name of the fundraising game is to “find your family, and stroke the folks”, as Michael Downes puts it. “People don’t wake up in the morning with a hot flush and say, ‘Who am I going to write a cheque out to today?’ You have to find them, and you have to persuade them.”
But how do you locate people who might give to your cause in the first place? Lists – a good list is like diamonds, and there were half a dozen companies at the alms fair trying to flog them. One organisation is known to earn $500,000 a year just for the list of the 15,000 people in Australia who have bought Porsche cars.
Since the average response to a random direct-mail drop or telephone campaign is less than 1 per cent, it also helps if the lists are tailored. Says Downes: “I am just spitballing, but you might buy a list of people who wear long underwear, because you know they are old and old folks are better donors.”
And that is one of the few verifiable facts about this little known industry. Brian O’Keefe, of O’Keefe and Partners, a Brisbane fund-raiser, has conducted detailed surveys which show that, although four out of five Australians donate something to charity every year, the age and geographical pattern vary widely.
People in the country give more than those in the city – 98 per cent in Western Australia, for instance, compared with only 70 per cent in Sydney. Women over 55 are the most generous (90 per cent of them give to charity) and men under 25 are the stingiest (62 per cent). The ideal list would appear to be all the widows living in Bunbury and Port Hedland who drive Porsches.
The type of charity also influences giving. Of the $1 billion donated by individuals (the other $2 billion-plus comes from corporations and trusts)nearly a quarter goes to churches; 18 per cent goes to social welfare causes, 10 per cent to international aid, followed by schools (8 per cent), the disabled (4 per cent), health (4 per cent), the environment (3 per cent) and the arts (1 per cent).
And, as governments of all political hues cut back their spending, established charities are finding stiff competition from organisations which were traditionally government-funded. Murdoch University in WA has just raised$1.5 million for books for its law library; the Peter MacCallum Institute in Melbourne, Australia’s premier cancer hospital, is asking the public for $12 million to help it move to new premises. Nearly 200 schools and colleges, many of them government-owned, have appointed full-time fund-raisers in the past few years.
Here at the TAIF conference to help them are organisations which – for a price – are offering everything from machines to fake your signature to automatic telephone-dialers, personalised air-freshening machines to computer disks of names and addresses.
For $3,500, The Software Group will sell you a computer program to increase the effectiveness of religious fundraising. It was adapted from a program designed to manage smash repairs and can now keep track of members of a congregation from baptism to death. The salesman, a bearded Irishman named Roy Brennan, is particularly proud of its “sounds like …” function, which can work out names from just a letter or two: “Really useful when you are trying to decipher the scrawl on the cheque from some little old lady.”
Down the road, Morley House has a nice little earner: a grab-bag of products which can be “individualised” to your own charity. There is a Taiwanese AM/FM radio disguised as a parking meter, a liquid-gel insole (“puts a massage in every step”), personalised doormats (“Welcome to Jan and Jeff’s”), a solar-powered ventilator for parked cars, a hair remover (“as seen on television”), and a crock of port. “No rubbish,” says sales manager Ian Stevenson. “Some of our competitors use rubbish, but you can only dud people once. All our stuff is genuine seven-year-old Rutherglen.”
Robe John and Associates has an arresting sandwich board (Stop Here |)attracting visitors to an exhibition of harrowing photo-montages illustrating crying children, a couple in front of a flooded house, five ragged men in a 1930s dole queue. “The Mud. The Smell. The Despair,” says a caption, in case anyone misses the point. Laurie Gordon, a former Herald sub-editor, has found greener pastures with Dandy Badges, which makes 8 million lapel badges a year, many of them for charities. I Found Time To Change The World (World Vision) is here, along with Cops Are Tops, and Helmeted Honey-Eaters Need Friends For Life.
“A lot of the people here are a bit … innocent,” he says, surveying the browsing charity people. “But I can sleep at night. I sell them badges for 20 cents; they can make $2 for them.”
“How much do you earn?” snapped the head of one of Australia’s largest charities when, as part of a survey of the top 12 fundraising organisations(see table this page), I asked him what his salary was. Said another: “That is a matter between me and my board.”
It is difficult to understand this defensiveness when these organisations are going to the public for hundreds of millions of dollars a year, and proclaiming that their books are open for inspection. In fact, only the Roman Catholic Church in Melbourne (whose Archbishop, Sir Frank Little, gets nothing more than a shared house, staff and a car), the Salvation Army (whose Territorial Commander, Robert Bath, gets just $15,000 a year), Freedom From Hunger, Community Aid Abroad and the Red Cross were willing to disclose their chief executives’ salaries.
Nor would most of them discuss in any detail what they pay professional fundraisers. Michael Downes estimated that Downes Venn (which has a worldwide income of $8 million) will bill 3 per cent of the $8 million it is raising over five years to restore the crumbling spires of Melbourne’s St Patrick’s Cathedral – $240,000. If this is anywhere near the mark, a fair guess would be that outside fundraising consultants are taking around $30 million a year from the Australian charity pool.
The biggest player by far in Australian fundraising (soliciting nearly twice as much as all the other overseas-oriented fundraising organisations put together) was World Vision with $66.9 million, much of it in pledges to support poor families in countries like Bangladesh. It was followed by Red Cross ($34 million), the Salvation Army ($31.5 million) and the National Heart Foundation ($19.9 million).
As for the claimed percentage of their funds eaten up by the cost of fundraising – the responses indicate quite clearly that different organisations use different calculations. For the record, the take ranged from the Multiple Sclerosis Society of NSW, which estimated its cost of”administration” at 7.5 per cent, to Red Cross, which said its costs were 26.1 per cent … although this may only mean that Red Cross is more frank about what, and how, it counts.
In the United States, which is in some ways a role model for Australia in the alms industry, this dilemma of not knowing just how effectively your favourite fundraiser is at delivering your dollars to the object of your charity does not really arise. In fact, all the overseas attendees (to stick to TAIF-speak) expressed surprise that in Australia the law does not oblige this disclosure.
In the US, according to Patricia F. Lewis, president and chief executive of the National Society of Fundraising Executives, any non-church organisation raising more than $25,000 a year from the public is required to be registered as a company and file a “990 return” every year to the Federal Securities and Exchange Commission detailing its audited accounts, including the salaries of its top three or five executives. Failure to produce these records, on demand, to the public can result in the charity being fined $10,000.
It was under this law that last month the public became aware that William Aramony, president of the United Way of America – a franchised supercharity which raises $A2 billion a year in weekly deductions from more than 14 million employees – was paying himself a salary of $617,000 a year, along with lavish expenses and first-class holidays for himself and his family. Delegates to the TAIF conference were quick to jump to Aramony’s defence (“He makes more money than BHP; why shouldn’t he be paid commensurately?” said one Aussie fund-raiser) but public pressure forced Aramony to resign.
Extraordinarily, in Australia the public would never know if the executives of three-quarters of the country’s leading charities were ripping off their benefactors to the same extent. All States have regulations requiring the registration of charities and the filing of annual returns, but in an Alice Through The Looking Glass scenario, no donor is allowed to know what the so-called regulators find out.
In NSW, for instance, there are an astonishing 27,000 registered charities- one for every 250 people – although only 12,500 are thought to be active. They are licensed by the Chief Secretary’s Department, and required to lodge audited annual returns. So, can the public inspect the records? “We are not at liberty to show them to you,” said a spokesperson. “It is a matter of commercial confidentiality.”
To be fair, the Chief Secretary, Anne Cohen, recently circulated a”discussion paper” on changing what is known locally as the Charitable Fundraising Act to oblige public disclosure of charities’ accounts, to make professional can-rattlers wear badges declaring that they are paid, and to limit the amount that can be spent on administration to 40 per cent (it is currently an extraordinary 60 cents in the dollar) But as the law stands now, the public has no legal right to know what their charity dollar is being spent on.
Nor even whether it is actually a charity at all.
It sounded like an eminently worthy cause: the Association for the Preservation and Welfare of Endangered Species and the Preservation of Australian Flora and Fauna. Everything in there apart from apple pie and the ozone layer.
For several years, using a variety of fundraising ruses, this government-registered NSW charity – which operated from a historic property called Notre Dame at the outback town of Mulgoa – raised hundreds of thousands of dollars for its declared charity.
Who could quarrel with that? Garry West, that’s who – at the time he was the State’s Chief Secretary, and in 1989 he felt obliged to stand up in Parliament and denounce the Association for the Preservation etc etc as “an insolvent enterprise” and “a charity in name only”.
The money the “charity” had raised had in fact been used by its head, Emmanuel Margolin, and members of his family, said Mr West. Instead of preserving animals, it had been spent providing rent-free accommodation for the Margolins, a $1,000-a-week salary for Paul Margolin as a caretaker, and paying for the family’s living expenses, including not one but two Rolls-Royces.
As at June 30, 1988, the bogus charity had accumulated losses of $310,000 and made loans of $1.3 million. It was, needless to say, struck off the register of charities.
Although cases of outright fraud are rare, they are not unknown. Last year NSW officials detected no fewer than 1,865 breaches of the Charitable Collections Act – most of them, admittedly, of a technical nature.
In recent years six charities have had administrators appointed to them, and were wound up: the Dubbo Aboriginal Advancement Association, the Handicapped and Disabled People’s Association, the International AIDS Prevention Programme Ltd, the Satyananda Ashram, Sydney Water Ambulance and the Terminally and Chronically Ill Children’s Association of NSW Ltd.
Victoria, where charities are regulated by the Corporate Affairs office, has had its share of shonky appeals, exploiting public sympathy for what appear to be the worthiest of causes: sick children, blind bowlers and wheelchair athletes have been some of the victims.
In the most celebrated case, early last year, fund-raisers rattling cans at street corners solicited $283,000 for a charity called the Australian Kids for Cancer Foundation. On investigation, it turned out that the charity was in fact a private company owned by a man facing charges of tax fraud: it operated from the same office as a dating service; it was not registered (or exempted)under the Fund Raising Appeals Act; and it had no agreement with any hospital to take the money. By the time Corporate Affairs investigators pounced, nearly$200,000 had vanished – much of it spent on such worthy objectives as a refrigerator, a television set, a microwave oven and recording equipment.
In a second case at around the same time, a fund-raising company named Highborne Pty Ltd was raising money for a Bundoora hospital for children with Down’s syndrome. Of the $44,000 raised in one street appeal, $20,000 went to the collectors (who were paid $12 an hour), $8,000 to the company’s director, one Anne Mahoney, $1,400 was spent on equipment hire and $1,000 on promotion. Less than a quarter of the take – $9,000 – actually went to the hospital. Ms Mahoney said that this was “nothing out of the ordinary”.
At the end of the day, as the recession throws more and more of the weight of community services onto the voluntary sector, as the charities prefer to call themselves, Australians are going to have to get used to smarter and more intensive efforts to prise loose the billions of dollars needed to run the schools and hospitals, the shelters and health programs, the homes and the foreign aid that governments can no longer afford. The sort of techniques that were on display in Canberra.
And they are going to have to get smarter in detecting the bogus appeals from the worthy, the efficient from the wasteful and extravagant, those that a re open to public scrutiny, and those that like to keep secrets.
What Australia’s top 12 charities do with your dollar
$ raised $66.9 m
Admin % 25.6%
Consultants Pilgrim Int $165,000.
CEO salary Philip Hunt NA
$ raised $34.8m
Admin % 26.1%
Consultants George Pattersons, free
CEO salary Alan McLean, $63,000.
NAT. HEART FOUNDATION
$ raised $19.9m
Admin % 19.9%
CEO salary Prof John Shaw, NA
COMMUNITY AID ABROAD
$ raised $12.4m
Admin % 23%
CEO salary David Armstrong, $43,900* *
$ raised NSW $4.1m, Aust $9.25m
Admin % 17%
CEO salary Jim Crawford, none
$ raised $31.5m
Admin % 13.7%
Consultants Philanthropic Marketing NA.
CEO Salary Robert Bath, $15,000 * * +
FREEDOM FROM HUNGER
$ received $8,2m
CEO salary Bob Debus, $55,000* *
MULTIPLE SCLEROSIS SOCIETY OF NSW:
$ raised $6.9m (+ govt. of 2.8m)
Admin % 7.5%
CEO salary Richard Bergstrom NA
GUIDE DOG ASSOCIATION OF NSW:
$ raised $5.5m
Admin % 20.16%
CEO salary Joseph Finucane NA
ROYAL FLYING DOCTOR SERVICE
$ raised $9.8m
Admin % 12.9%
Consultants Downes Venn, NA
CEO salary Allan Thomson, NA
ROYAL BLIND SOCIETY
$ raised $8.5m
Admin % 22.3 %
CEO salary John Isaacs. NA.
ROMAN CATHOLIC ARCHDIOCISE OF MELB
$ raised $8m restoring St Patrick’s
Admin % 8%
Consultants Downes Venn $240,000
CEO salary Archbishop Sir Frank Little ++
* Last financial year
* * plus car
+ plus accommodation
++ no salary, use of house, car and living expenses
Pub: Sydney Morning Herald
Pub date: Saturday 14 March 1992
Word count: 3730
Keywords: Charities Welfare
Caption: Drawing: By Michael Fitzjames Three Illus: Badges Table: What Australia’s top 12 charities do with your dollar