Appco Australia acts on class action allegations

Friday, October 28th, 2016

Posted at 1:53 pm

The owner of one of the 64 active marketing agencies contracted to Appco Group in Australia will voluntarily step aside pending an investigation into improper practices relating to fundraising.

Appco Australia has demanded all marketing companies it contracts with provide all information about suspected or known practices that could be construed as bullying or harassment, and provide written assurances that their businesses are not tolerating such behaviour.

The CEO of Appco Australia, Mr Martin Gaffney, said those agencies that could not give a written assurance would have their contracts with Appco Australia reviewed. The marketing agencies had also been instructed to inform their independent fundraising contractors that if they had any concerns they should come forward and their concerns would be treated with the utmost seriousness.

“We will not tolerate, condone or turn a blind eye to the type of behaviour alleged,” Mr Gaffney said.

Mr Gaffney said while he did not believe improper practices were widespread or systemic, Appco Australia was taking the allegations seriously with two separate investigations into allegations that surfaced last week as part of a class action.

Appco Australia has engaged a tier 1 legal firm to lead an investigation into allegations of bullying. A second tier 1 legal firm will investigate allegations of so-called sham contracting, a claim Appco vigorously denies and mitigates against through regular independent reviews of the independent contractor model.

Mr Gaffney said: “We have nothing to hide. There is no way we will tolerate bullying or harassment or any behaviour that breaches employment law.”

Appco Australia: our record

Mr Gaffney said Appco Australia was proud of its 29-year history of providing high-quality marketing, fundraising and brand awareness services to its clients. Appco Australia has raised hundreds of millions of dollars to help fund some of Australia’s leading causes, including those that provide vital care and support to Australians in need.

Organisations choose Appco Australia to represent them in part because they want a cost-effective method of reaching their donors and a measurable return on investment, and Appco Australia has consistently provided that service.

There has never been an adverse finding against Appco Australia by the Fair Work Ombudsman, the Fair Work Australia Commission or any other court or regulator.

“Our business is built on an entrepreneurial philosophy which allows individuals to build their own businesses.”

Mr Gaffney said the first Appco Australia heard of the allegations or the class action was in media reports last weekend. No individuals, unions, lawyers or anyone else had brought these allegations to us before the story broke, he said.

 

Appco Australia: our structure

Appco Australia has contracts with 64 marketing companies nationwide.

Appco Australia is paid an agreed fee per donor it acquires for a charity from the charity’s pre-allocated fundraising budget. This fee is a one-off payment. Regardless of how long a donor continues to donate to the charity, Appco Australia receives no other payment.

The donation pledge form clearly explains how the fee to Appco Australia is calculated. Most donors continue to donate to the charity for an average of at least three years. The fee to Appco Australia is approximately 31% of the funds raised over the average three-year donation period. Charities realise an excellent and measurable return on investment because many donors remain committed regular givers for many more years.

There is also a ”clawback” provision to protect charities’ investment, under which charities who work with Appco Australia are reimbursed if a donor cancels a pledge within an agreed timeframe (usually 3 months).

Appco Australia pays approximately 80 per cent of its receipts from charities to the marketing companies with which it contracts. Marketing companies, in turn, are responsible for paying the independent contractors with which they contract.

Appco Australia provides guidelines on contracting and requires the marketing companies it engages to operate within the law. But the independent contractor agreement is between the marketing company and the individual.

“Our experience shows that a contractor who chooses to do the equivalent hours of traditional employment working week will, on average, sign up 1.5 donors a day. This will provide them with an income above the minimum wage.

“But we recognise that some people choose not to work the equivalent of an average week, or even full days, which is part of the flexibility offered as an independent contractor. Others are simply not suited to selling. Still more do remarkably well and go on to build their own successful businesses, whether that’s contracted to Appco Australia or in an entirely different field.”

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