David Chaplin 's Opinion

A personal finance columnist for the NZ Herald

Inside Money: Chugging along: are charities too in-your-face?

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Are friendly charity collectors like Rotary volunteer Ken Linkhorn (r) being pushed aside by hustling chuggers?  Photo / Janna Dixon
Are friendly charity collectors like Rotary volunteer Ken Linkhorn (r) being pushed aside by hustling chuggers? Photo / Janna Dixon

Charity today begins in the streets, not the home.

'Face-to-face fundraising', as it is known, has taken off in New Zealand over the last couple of years.

On any given day it's possible there are hundreds of recruiters - also known as 'charity muggers' or 'chuggers' - hustling for guilt money on street corners throughout New Zealand.

Armed with clipboards, high-vis jackets and their good causes, the chuggers-for-hire have replaced the tin cup-rattling volunteers of the previous century.

Based on my own experiences, most of the chuggers appear to be English backpackers - or maybe they're just the more aggressive ones, the 'in your face fundraisers' in a hurry to make a sale and move on.

Chugging in the UK, anyway, is more established and the social problems it creates are well known, as this article reveals.

While street fund-raisers may be restricted somewhat by local laws, there are no specific regulations relating to their behaviour. The professional fund-raising business, however, is self-regulating to a certain extent under codes of practice authored by charity industry bodies. There's no guarantee, of course, that every chugging charity will be a member of the relevant industry body.

Recently, the UK Public Fundraising Regulatory Association (PFRA) updated its rules to clarify street contact etiquette for chuggers - ie, when chugg off means chugg off.

The UK PFRA also changed its code to stipulate "fundraisers should not stand within three metres of a cashpoint".

While the New Zealand PFRA hasn't made a cashpoint ruling yet, its chugger code of conduct does include a ban on percentage-based commissions (although other "performance-based" remuneration are permitted).

As well, clause 7.1 (h) requires that chuggers not "seek a donation from a person if it is realised that a person lacks understanding of financial affairs, or has an obvious intellectual disability, seems frail or vulnerable", which places a high degree of judgment in the hands of these clipboard-holders.

The charities that chug are clearly aware that the street-hawkers could damage their brands, and the codes of practice are an attempt to limit that risk. But it's a risk they're willing to take because chugging works.

Check out the powerpoint presentation from World Vision NZ 'National Face to Face Engagement Manager', Scott Palmer, which documents the 400 per cent "sales growth" over two years, with 85 per cent of new donors signed up by the chuggers.

Palmer also highlights the low "cost of acquisition" attributed to chugging, on average about 10 per cent of donations received for World Vision, which does it in-house. Most other charities outsource to external chugging agencies that charge between 70-90 per cent of the first year's donation, according to Palmer.

It looks like the chuggers are here to stay, particularly, as the PFRA website says: "Traditional forms of raising income for charities, such as cash appeals and direct mail are becoming less effective, especially in the face of marketing overload from all sources."

But chugger overload is also a threat. My guess is that the public will learn to blank out chuggers as their numbers increase, just as I ignored those messages scrawled on cardboard held up by three more-traditional beggars on Lambton Quay last week - there were too many to face.

David Chaplin

A personal finance columnist for the NZ Herald

David is a freelance journalist who has covered the financial services business on both sides of the Tasman for over 15 years. David has edited magazines and websites for the financial advice, investment and superannuation industries. Today, he contributes to various publications in Australia as well as his bi-weekly blog for the NZ Herald under the 'Inside Money' banner.

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