Seven fundraising companies closed down

Fundraising | Gemma Ware | 11 Apr 2008

Seven fundraising companies based in and around Manchester have been wound up in the High Court following investigations by the Department of Trade and Industry.

Three of the companies, Rosshoe Ltd, UK Fundraisers 2004 and Combined Trading Services were closed down on 25 October after the court recognised they "misled the public and seriously lacked commercial probity", according to the Insolvency Service. On 1 November, four further companies, Drawtreat Limited, Fernchester Ltd, Nationwide Fundraisers Ltd and Help For All, were also wound up.

The investigation by the Companies Investigation Branch of the Insolvency Service found that Rosshoe had raised over £800,000 in donations from a telephone fundraising enterprise, but less than £50,000 had made its way to their charity clients. UK Fundraisers 2004 had also collected over £1m from commercial donors through telesales and collections, but investigators found only 4.5 per cent had been paid to charities.

Drawtreat built up a 60,000-page database of potential business donors that was used by its sister companies Fernchester and Nationwide Fundraisers. In 2003 alone Fernchester raised over £1.24m for two charities, Lancashirebased Freedom for Children Foundation and Manchester-based Forget Me Not, but investigators found the company only paid the charities £175,000, keeping £875,000 for itself. The Charity Commission closed down both charities in April 2006 and inquiry reports on the cases will be published early next year.

A spokeswoman for the Insolvency Service said the Official Receiver would now be approaching the companies to find out why they became insolvent. If any misconduct is uncovered, then the directors could be investigated, she said.

The spate of closures comes as Tony Freeman, the fraudulent head of Scottish fundraising agency Solutions RMC, was sentenced for 18 months in prison earlier this month. Freeman had collected £13m in donations for Breast Cancer Research (Scotland), but only £1.5m had been passed to the charity while Solutions RMC collected 8m in commission.

Who's Who: Gemma Ware

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