Charity costs hit at the heart

The company behind a controversial epilepsy fundraising campaign is running another nationwide charity promotion - and taking two-thirds of the donations.

Tauranga's Promotional Development Services Limited (PDS) has defended its charity work, which includes running Heart Children New Zealand's variety event series.

But of the $748,000 raised last year, less than a third went to the charity, while 68 per cent was used for telemarketing and other costs, including a 20 per cent management fee.

Other fundraising companies said no more than 30 per cent of donations should go towards costs, and described a percentage-based fee as unethical.

PDS director Craig Ivimey said he was proud of the work the company did for several charities - of which he named only Heart Children.

"It seems we're now under attack for being employed by charities to assist them," he said.

Ivimey wouldn't answer further questions, but issued a statement saying PDS was a private company and "like any other company in New Zealand we don't have to answer media questions about our business".

Heart Children chief executive Lara Syddall said feedback from the variety events, attended by disadvantaged children and their families, was "extremely positive ".

The $237,000 they received last year went towards providing support and assistance for families of children with heart conditions.

Syddall said the contract with PDS prevented her from providing a full breakdown of costs.

Jane Sheetz, director of event management and fundraising company P10, said costs of a fundraising drive shouldn't be higher than 30 per cent of takings, and could be as low as 3 per cent, depending on the type of campaign.

Sheetz said commission-based management fees were unethical. "It has connotations of commission canvassing, which can mean harassment of donors."

Pam Glaser, director of Crackerjack Promotions, said it was getting tougher to ensure a good return on charity events.

"Most of the successful fundraising events in the past were successful because all the costs were donated," she said.

"From my perspective, unless you run an auction at the fundraiser, there's very little money to be made."

Fundraising Institute of New Zealand (FINZ) chief executive James Austin was also opposed to percentage-based fees, because it promoted aggressive canvassing. Austin described the charity events industry as a "time bomb waiting to go off".

"People go along and write a cheque and think it's going to the charity. There are real issues there."

FINZ was working on adopting fundraising codes of practice, covering telemarketing and event management. "There are some very reputable organisations out there which do a wonderful job - it's the cowboys we want to get rid of," Austin said.

Charities Commissioner Trevor Garrett urged donors to keep giving, but to "make sure that you're aware and give in a way that's most beneficial to the charity".

Public rallies around epilepsy charity
Epilepsy sufferers who received little support from last year's fundraising drive have received an outpouring of public sympathy.

But those at the centre of a row between two charities still won't talk about where the money went.

The Herald on Sunday revealed last week that of $2.8 million donated to an Epilepsy Foundation campaign, $2.1m was spent on costs and telemarketing.

Just $70,000 was passed on to Epilepsy NZ, the charity that provides services for people with the condition.

The rest went on operating costs and a capital fund administered by the Epilepsy Foundation.

The company Promotional Development Services (PDS) organised the series of events for special needs children on behalf of the foundation, and ran a phone campaign to raise sponsorship from businesses.

PDS director Craig Ivimey said the costs included administration, contracting marketers to help with sponsorship, day-to-day operations and database maintenance.

He said in a statement that it would be inappropriate to disclose any further details.

The Epilepsy Foundation also wouldn't comment, although secretary Annette Leach said it disagreed with Epilepsy NZ's stance.

Epilepsy NZ has now severed all ties with the foundation, and will run its own fundraising. General manager Frank Gouveia said he'd had no contact from the foundation in the past week, but had received a "huge amount of sympathy and support" from the public.