Stephen Cook: The GoGen closure is another twist of the knife

The cloud over fundraising will not help the predicted shortfall in the sector's finances in coming years

Stephen Cook
Stephen Cook

The misery of the fundraising industry was completed this week by the announcement that GoGen, the telephone fundraising business that featured in recent undercover stories by the Daily Mail, is to go out of business with the loss of nearly 500 jobs. This is a heavy price to pay and a great injustice to most of those affected.

A central allegation by the Mail was that the agency was exploiting a loophole by calling people who had given their details to charities but were also registered with the Telephone Preference Service, thus indicating that they did not want marketing calls. The Information Commissioner’s Office would not confirm the statement by GoGen yesterday that it had dropped its investigation of the company because it was satisfied that it complied with all data-processing rules. But if what GoGen says is true and its staff were acting properly in calling TPS-registered individuals who were willing supporters of the charity concerned, that is a cruel twist of the knife.

The GoGen collapse is part of the unfortunate – and disproportionate – price being paid by an industry that miscalculated the extent to which it could safely persist with fundraising methods disliked by the public, brushing off or discounting growing evidence of that dislike and previous TV or newspapers exposés. This left it unable to defend itself effectively against a tabloid attack bordering on vindictiveness. Charity trustees were ultimately responsible, and seem in most relevant cases to have remained ignorant or turned a blind eye.

Everyone now says lessons are being learned, and recriminations won’t help much as minds turn to rebuilding on better foundations. It should also be remembered that most fundraising methods are accepted by the public and that most charities are not at fault and have nothing to reproach themselves for. But a cloud is hanging over everything at the moment.

All this bad news coincides with a sobering report from the National Council for Voluntary Organisations, produced with the other main sector umbrella bodies, about the future sustainability of the sector. The report exposes how vital voluntary income from individuals has become for charities as public spending restraint continues to tighten. If the sector’s income is to keep pace with inflation between now and 2018/19, it says, "income from individuals, earned and donated, would need to grow by 4.5 per cent per year in real terms". Growth of that order is not going to be facilitated by recent events.

For more than five years, the sector has been in the process of readjusting to the new economic realities after the golden years of the noughties. It has coped and adapted in realistic, creative and sometimes painful ways. But it’s clear that the new government’s economic strategy means the process is far from over, and the question marks placed over fundraising are not going to help. The sector might be in for more significant retrenchment.

How to face up to this unhappy prospect? A good start might be to study the closing page of the NCVO report, which suggests 10 things voluntary organisations can do to mitigate the pressures, ranging from understanding your operating model to mapping your assets and liabilities. Carrying on as before, crossing your fingers and hoping for the best, is not a wise option for most organisations.

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