Charity collection companies pocketing commission so high, they soak up a year’s worth of donations

NEEDY people are missing out on millions of dollars in charity cash as middlemen collectors and backroom administrators suck up Australians’ generous donations.

NEEDY people are missing out on millions of dollars in charity cash as middlemen collectors and backroom administrators suck up Australians’ generous donations.

Some charity collection companies are pocketing commissions so high that they soak up more than a year’s worth of donations.

A Daily Telegraph analysis of charities’ financial reports, filed with the Australian Charities and Not-for-profits Commission, reveals how millions of donor dollars are being sucked into administration.

The Starlight Children’s Foundation spent $13 million on fundraising to collect $35 million in donations in 2016.

EDITORIAL: MILLIONS LOST TO ADMIN

The Starlight Children’s Foundation spent only half of the money collected on helping sick kids. Picture: Supplied

The Starlight Children’s Foundation spent $13 million on fundraising to collect $35 million in donations in 2016.

Only $19 million was spent on “program costs’’ — meaning that barely half the money collected was spent directly helping sick children.

Oxfam Australia spent nearly as much on backroom expenses as it did on aid. It spent $55 million on “program costs’’ to fight third-world hunger — but also spent $17.7 million on fundraising expenses, on top of $16.7 million in administration costs, in the 12 months to March this year.

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Oxfam yesterday confirmed that it pays commission to outside agencies as well as its in-house fundraisers.

“The average length of a donation is five years, and roughly 17 to 20 per cent of the donation will go to the fundraising company over that time,’’ Oxfam spokeswoman Pam Anders said. “In year one, it ranges from 90 to 100 per cent ... this is outlined in the agreement when the person signs up to becoming a regular donor.’’

ACCC chairman Rod Sims.

Ms Anders said 67 per cent of donations went towards “program work’’ such as emergency responses with 22 per cent spent on fundraising and promotion and 11 per cent on administration.

Greenpeace Australia Pacific Ltd made a $3 million loss last year, after collecting $16.8 million and spending $8 million on fundraising, $11 million on “campaigning expenditure’’ and $1.5 million on “organisational support’’.

Cancer Council NSW spent more on fundraising — which cost $21.7 million — than on research — which cost $15 million — after raising $67 million last year.

“For every $1 donated … we’re proud that we spend 60 cents on our mission of creating a cancer-free future for everyone, through pioneering cancer research, prevention and support services,’’ a Cancer Council NSW spokeswoman said.

Cancer council‘s admin costs are significant

An Australian Competition and Consumer Commission audit yesterday revealed it was common for collection agencies to be paid between eight and 17 months’ worth of donations for signing an individual to a monthly plan.

ACCC chairman Rod Sims said he was surprised by the high commissions charities were paying.

“If you want to donate you might be well better off contacting the charity and donating directly,” he said.