Telephone fundraising agency R Fundraising entered administration this week after its parent company Fundraising Initiatives Group established the telephone agency did not have a viable future, following the negative publicity over the past few months around charity fundraising and telephone fundraising in particular.
The company closed for business on 28 July 2015 and was placed into administration on 3 August.
99 jobs lost
The closure of R Fundraising means that 99 staff members were made redundant, 82 in Dunfermline and 17 in Manchester.
These losses follow those at GoGen, a telephone fundraising agency which was criticised in national news over alleged fundraising practices and targeting of vulnerable people, and which subsequently closed last month with the loss of 485 jobs.
Hamish Horton, Group Managing Director of Fundraising Initiatives Group, announced the move into administration “with deep regret”, adding that it was “not a decision that has been taken lightly”.
Financial support and rescue plan
R Fundraising had been the newest member company of Fundraising Initiatives Group. It acquired it in January this year when it was approached with a request to support the agency that was struggling financially. Fundraising Initiatives reported “a positive first quarter” as it tried to help the agency reach a secure footing.
However, the extensive national media investigation and allegations about other telephone fundraising agencies resulted in some charities pulling back from telephone fundraising. Fundraising Initiatives senior management worked with R Fundraising’s managing director Gordon Michie “to exhaust all possible options to keep the agency open”.
Jon Beard of business recovery specialists Begbies Traynor, who are handling the administration process, told UK Fundraising:
“We were instructed by the company to discuss its options after a winding-up petition was served. It became apparent from our discussions that the company was not a viable concern as it was loss-making and heavily reliant upon significant funding from its parent group in order to meet wages and other overheads”.
“We therefore worked closely with the management to place the company into administration in order to allow for employee claims to be dealt with at the earliest possible time. We continue to work closely with the company to expedite payment of employee claims from the National Insurance Fund…”
Hamish Horton stated:
“It is hugely disappointing that we were unable to rescue R Fundraising, its skilled and experienced fundraisers and its services to the charity sector, when our starting point was to do just that”.
Group directors attended the Dunfermline and Manchester offices in person together with representatives of the administrator to notify staff of the closure and to ensure the decision and the redundancy process were explained in full.
Prior notice and normal payment was not possible because of the rules of the administration process. The Group states that “all staff have been given the necessary information to be able to recover the salaries owed to them as quickly as possible by claiming through the Government’s Redundancy Payments Service via the administrator”.
Support for staff
In a statement to UK Fundraising, Horton thanked “all members of staff for their hard work and loyalty to the agency”.
“We are very conscious that real people with real lives are being affected, many of whom have been working with the agency for long periods, and we are deeply sorry for the unavoidable and wide reaching impact the closure will bring to staff and their families”.
He added that the Board was talking to another telephone fundraising agency to support any charity clients in mid-campaign for continuity in their fundraising.