Analysis: Why charities are shifting street fundraising in-house

The demise of some major agencies is one factor has contributed to an increase in direct employment

Amnesty International street fundraisers
Amnesty International street fundraisers

Recent figures from the Public Fundraising Regulatory Association show that more charities are using their own staff rather than agencies for their face-to-face fundraising. In 2012/13, 58 per cent of the 125,827 new donors recruited on the street were signed up by in-house teams - more than double the proportion of 26 per cent of the 238,273 sign-ups in 2011/12.

Both the record proportion of in-house sign-ups and the 47 per cent fall in the number of recruits can be explained in part by the closure last year of Gift Fundraising, the UK's largest street fundraising company, which alone contributed about 30 per cent of all sign-ups. But what other factors are at play?

Charities face a complex choice when weighing up whether to use agencies or recruit and train their own fundraisers. To minimise the financial risk, charities often use agencies while developing their own in-house teams, because agencies are paid only an agreed fee for each donor they recruit. Contracts also often include claw-back agreements, so if sign-ups do not make the first payment - known as "no-shows" - the agency has to recruit replacement donors without further payment.

If charities operate in-house teams, by contrast, they are obliged to pay their fundraisers regardless of whether they recruit donors. But in-house teams give charities more control over their brands, and fundraisers more directly connected to the cause can, after initial costs, bring in better quality, more committed donors.

Nick Henry, the PFRA's head of standards and allocations, says the closure of Gift and other agencies has given charities the opportunity to employ experienced agency staff, who often welcome the chance to work directly for a charity. Bringing street fundraising in-house also affords charities greater control over the numbers deployed on the street and their location, he says.

Henry says the British Red Cross, which was already running its own teams, has been able to expand them more quickly since the closure of Gift and is now working in nearly every region of the UK.

Shelter, which does not use agencies, is going a step further and launching a "street academy" that it hopes will provide it with a lucrative new income stream. According to its chief executive, Campbell Robb, its in-house fundraisers generate higher retention rates and fewer complaints, and he wants to share their success with the sector. Details of the scheme are expected soon.

In another development, EveryChild, a long-time proponent of in-house teams, has stopped using face-to-face and the National Deaf Children's Society has stepped in to recruit some of its fundraisers to its own new 30-strong in-house team, which started work in July. Mike Wade, director of fundraising and communications at the NDCS, says it will continue to work with agencies, but sees its own operation as crucial to growing income.

Amnesty International UK has trained in-house street fundraisers since October 2011, says Simon Nicholls, direct marketing manager at the human rights organisation. He describes the operation as very small, with two teams of up to five fundraisers working in London and the south east. "Usually we would also have an agency recruiting for us to minimise risk, but we were using Gift," he says. He adds that the in-house team's no-show rate is far lower than that of agencies, and the team is also doing better on retention.

"We saw attrition rates rising, and the demise of various agencies meant it was becoming more of a seller's market," he says of the charity's decision to set up an in-house team. "Costs were increasing, but the quality was not there. Agencies did not necessarily provide the best deal in terms of refunds or replacements for the donors that dropped off."

Nicholls believes that making street fundraisers feel part of Amnesty means they are better fundraisers, better informed about campaigns and better brand ambassadors. But he says that agencies definitely have a role to play and has not ruled out working with the right organisation to give Amnesty greater national coverage.

The British Red Cross launched its in-house teams three years ago and now has 100 fundraisers working on street and door-to-door campaigns, according to Ruth Mantle, its head of regular giving acquisition. Agencies are still producing the lion's share of sign-ups at the moment, she says, but the charity has not ruled out growing its own operation further in the future. The in-house team's record on donor retention is on a par with that of agencies, she adds.

Rupert Tappin, director of the agency Future Fundraising, says he has not seen a huge number of charities setting up in-house. "But I don't think there will be another super-agency to replace Gift," he says. "There is no commercial drive for agencies to become super-agencies."

He says the PFRA's site-management agreements with local councils are a good thing in that they build the long-term sustainability of the technique, but they also drive up costs for agencies because fundraisers have to travel more. "Agencies face a huge amount of risk," he says. "Charities want you to deliver more and more donors, but if you drive volume too much, quality is going to suffer."

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