Charity "cowboys" are damaging the reputation of the non-profit sector, prompting the Fundraising Institute of New Zealand to begin a review on questionable fundraising practices, chief executive James Austen says.
Epilepsy New Zealand severed links with another epilepsy charity, the Epilepsy Foundation, last month after it was revealed three quarters of the $2.8 million raised in donations went to a telemarketing company.
Epilepsy New Zealand received only 2.5%, $70,000 in donations, an "atrocious" result, Mr Austen said.
As a result of the revelation "a lot of people are going to be wary and charities will be suffering".
While it was increasingly common to use telemarketing as a method of fundraising, either by charities or by reputable companies, a small number of "cowboys" were harming the sector during a time of increasing high need, he said.
When asked if he had heard of other questionable fundraising practices, Mr Austen said, "I don't believe this is the only one . . . we are actively looking at others."
"This doesn't do our industry any good. We want them out."
While telemarketing was a legitimate form of fundraising, more than half of all raised funds should be returned to charities.
"If costs are exceeding 50%, you have to ask questions."
People with concerns should also ask the telemarketer whether the charity belonged to the Fundraising Institute of New Zealand, as members were held accountable to a strict code of ethics and code of conduct, he said.
There was no completion date for the review.
• If a charity calls:
- Ask how much of your donation will go to the charity
- As a rule of thumb, more than half of a donation should be going to the charity
- Ask whether the charity is a member of the Fundraising Institute of New Zealand
