Commission-based charity fundraising is a channel that has long been used by charities to obtain donors. The practice typically involves an individual fundraiser approaching members of the public on the street or at a public location (shopping centre, railway station, etc.) or moving from door-to-door and knocking uninvited, then attempting to sign-up donors. A variant of this practice involves a member of the public being contacted by an unsolicited telephone call to agree to a donation to a charity.
There is concern that street, door-to-door or telemarketing approaches are associated with higher levels of public detriment. This is because of the particular characteristics commonly associated with this marketing approach - for example, its unsolicited nature and the high-pressure tactics that may be employed by some individual fundraisers. For this reason, commission-based charity fundraising has generally been subject to a greater degree of media scrutiny than some other channels.
This report was prepared by Frost and Sullivan for the Australian Competition and Consumer Commission (the ACCC). The ACCC is currently prioritising work involving consumer issues arising from commission-based sales business models. One of the sectors being considered is the charity fundraising sector and in particular, consumer issues related to the use of commissions with external fundraising agencies.