One of the directors of Dunfermline-based fundraising agency Karat Marketing confirmed that the organisation has gone into administration, blaming the “challenging and volatile market conditions” and issues around GDPR as the reason for its closure.
In a statement released yesterday afternoon Lauren Semple, development director at the agency, said she expected Karat Marketing to close by 12 June and that her and the other directors “have met with administrators to begin a consultation process and the agency’s 17 staff and charity clients have been informed”.
She blamed the agency's closure on "the current challenging and volatile market conditions in the Scottish charity sector, combined with hesitation surrounding the upcoming GDPR legislation. It is much more difficult for charities to sign off campaigns.”
Semple confirmed that "staff have not been paid their final salary through Karat," but said "I am personally helping the staff with their applications to the redundancy payments service to ensure they get what they are entitled to as quickly as possible”.
She also said “the directors want to be clear that Karat owes no money to charities” or other creditors, and that due to the investment of other directors “had no overdraft or loans out”.
She also said that none of the directors were paid salaries for their work at Karat and had indeed lost investment when the organisation went into administration.
The organisation worked predominantly with Scottish charities and small-to-medium UK charities providing telephone fundraising and consultancy services.
It worked on behalf of Friends of the Earth, PoppyScotland, Quarriers, Scottish Association for Mental Health, Thistle Foundation, The Children’s Trust, Sense Scotland, Erskine, Children’s Hospices Across Scotland (CHAS), and Chest Heart & Stroke Scotland.
Statement in full
“To announce our closure is absolutely heart-breaking for all involved. We have tried our hardest over recent months to keep the business going, the three directors have not taken salaries and our staff have been amazing in taking reduced hours, to support the business, for which we thank them sincerely. While we have supportive clients, the work just isn’t there and we’ve exhausted all our options to keep afloat. Making this decision has been very difficult and is our absolute last resort.
“The Scottish market is very difficult just now, charities are being cautious, understandably and still adjusting to the required changes for GDPR, campaigns can be moved or cancelled at the last minute and we have experienced longer than usual campaign sign-off periods – for some we’ve had to wait four or six months for a start date and, very sadly, this has meant we’ve been unable to hold on. We have simply been unable to secure long term contracts to ensure our business can continue providing services to our clients.
“We will be doing everything we can to support our staff through the closure process and in their onward job searches; they are a group of extremely talented and experienced fundraisers that have helped charities all over Scotland and the closure of Karat is by no means a reflection of their hard work, commitment and results.”
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