Analysis: What does the closure of Gift Fundraising mean?

Dominic Will, who became joint managing director of the company last year, says he remains optimistic about street fundraising's future

Dominic Will
Dominic Will

When Gift Fundraising, the UK's largest and longest-established fundraising company, went into voluntary administration this month, it shook the street fundraising profession.

The move left 300 staff without jobs and a number of charities without an agency to carry out street fundraising on their behalf. So why did Gift fail, and does this have wider significance for street fundraising?

It is not the first time a large agency has gone into administration. In October 2009, Dialogue Direct, which employed about 20 office staff and 35 teams of five or six people, went into voluntary liquidation.

Earlier in the same decade Open Air was liquidated, with its business transferred to various companies trading as Fruitful Fundraising, which in turn went into administration in 2004. Not long before this, Caring Together and the Push Consultancy also went under.

Dominic Will, who became joint managing director of Gift with his colleague Neil Hope in the middle of last year, says he was initially confident that Gift could become sustainable in the long term.

"Unfortunately, we ran out of time to make the changes that we wanted to," says Will, who is also joint managing director of the door-to-door fundraising agency Home, a separate company.

He says the decision to enter administration, rather than liquidation, meant staff could still be paid and liabilities to creditors met, and he is confident this will happen.

Will says he had wanted to improve Gift's performance in areas ranging from training and management to the way it incentivised fundraisers, but a weak winter trading performance derailed operations. "We had a 15 to 20 per cent downturn in performance over a six-week period," he says.

Despite this, he remains optimistic about street fundraising's prospects and doesn't rule out Home venturing into this market. However, he says it currently has no plans to do so and that his priority is to settle Gift's liabilities through the administration process.

One street fundraising issue he thinks needs resolving is the allocation process of sites outside London. "In London, the number of sites you get is based on the scale of your operation," he says. "Outside London it doesn't matter whether you're a large agency representing a number of charities, you will get the same opportunities as an organisation with one team of fundraisers. This doesn't help the sustainability of the market."

The Public Fundraising Regulatory Association set up a working party in November to look into this issue, but it will not make any decisions until the summer.

Stephen PidgeonStephen Pidgeon, a trustee of the Institute of Fundraising and principal consultant at the direct marketing agency Tangible, says he is surprised more agencies have not gone bust.

The relationship between profit-driven companies and charities can be a difficult one to manage, he says. "It's really hard running a commercial agency that works with charities. Charities think differently from businesses."

A question mark now hangs over how long it will take the sector to recover the volume of donor sign-ups it is bound to lose from the demise of an agency the size of Gift. If the situation with Dialogue Direct is repeated, it could take two years.

Ian MacQuillin, head of communications at the PFRA, says its statistics indicate that sign-up rates have only just recovered to the levels they were before Dialogue Direct folded.

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