Commission-based fundraising: does paying per sign-up help or harm charities?

The debate in brief

Charities have long used external agencies, paid on commission or a per-sign-up basis, to recruit new donors. Face-to-face fundraisers on the high street ("chuggers") and telephone fundraising agencies working on a no-win-no-fee model can acquire thousands of regular givers quickly. For charities without large in-house fundraising teams, outsourced commission-based fundraising has been one of the few routes to sustainable growth.

But the model carries real risks. Commission structures can incentivise aggressive tactics, and donors acquired under pressure tend to cancel quickly. The death of 92-year-old Bristol poppy seller Olive Cooke in May 2015, after years of receiving hundreds of charity solicitations, triggered a national reckoning. The subsequent Etherington Review and the creation of the Fundraising Regulator in 2016 reshaped the regulatory landscape. The fundamental tension, however, remains: charities need donors, agencies need income, and the people being asked for money need protection.

Quick takeaways

The arguments

The case for commission-based fundraising

For many small and mid-sized charities, commission-based agencies are the only realistic way to build a regular giving base. Hiring, training, and managing an in-house face-to-face team requires capital investment that most organisations cannot afford. The commission model shifts the financial risk from the charity to the agency: if the agency fails to recruit donors, the charity pays nothing.

The economics, when the model works, are compelling. A charity paying 100 pounds per acquired direct debit donor giving 10 pounds per month recoups that cost within a year. If the donor stays for five years, the return on investment is substantial. The Public Fundraising Association (now part of the Chartered Institute of Fundraising) estimated that face-to-face fundraising generated over 600 million pounds annually for UK charities at its peak, making it one of the most significant sources of regular giving income in the sector.

Defenders of the model also argue that face-to-face fundraising reaches people who would never respond to direct mail, digital advertising, or other channels. It diversifies the donor base both demographically and geographically, and it creates direct human contact between charities and the public at a time when many other forms of engagement are increasingly digital and transactional.

The case against

The incentive structure of commission-based fundraising is the core problem. When an agency is paid per sign-up, every interaction becomes a conversion opportunity. Fundraisers under pressure to hit targets may use high-pressure tactics, fail to adequately explain commitment terms, or sign up donors who cannot afford regular giving. The charity's name is on the tabard, but the person wearing it works for a commercial company whose revenue depends on volume.

The attrition data tells its own story. Research by the Institute of Fundraising and others has consistently shown that donors acquired through face-to-face fundraising cancel at significantly higher rates than those acquired through other channels. A 2017 Rogare review of fundraising ethics noted that high attrition rates effectively mean charities are paying to acquire donors they will shortly lose, creating a treadmill of perpetual recruitment.

The reputational cost is harder to quantify but arguably more damaging. The term "chugger" itself, a portmanteau of "charity mugger," entered common usage because of widespread public irritation with aggressive street fundraising. The Charity Commission's Public Trust in Charities research has repeatedly found that fundraising practices are a significant driver of public distrust: in 2025, 26% of those reporting lower trust in charities cited concerns about how charities fundraise.

What the Olive Cooke case changed

Olive Cooke's death in May 2015, though the coroner recorded a verdict of suicide unrelated to charity solicitation, became the catalyst for a national reckoning. Cooke, who had sold poppies for the Royal British Legion for 76 years, was receiving up to 267 charity mailings per month. Her family described her as overwhelmed by the volume of requests, many generated by data-sharing between charities and commercial fundraising agencies.

The public outcry was immediate. The government commissioned Sir Stuart Etherington, then chief executive of NCVO, to lead a review of fundraising self-regulation. The Etherington Review, published in September 2015, found that the existing self-regulatory regime under the Fundraising Standards Board was inadequate. Its central recommendation was the creation of a new, independent Fundraising Regulator with stronger powers, funded by a levy on large fundraising charities.

The Fundraising Regulator was established in July 2016. The Charities (Protection and Social Investment) Act 2016 gave it a statutory underpinning, requiring charities with annual income over one million pounds to declare whether they had received complaints about their fundraising. The Act also gave the Charity Commission enhanced powers to act against charities that failed to protect vulnerable people from undue pressure.

The evidence

The economic case for face-to-face fundraising depends heavily on donor retention. The Chartered Institute of Fundraising's benchmarking data shows that the median cost of acquiring a regular giver through face-to-face fundraising ranges from 80 to 130 pounds. At a typical monthly gift of 8 to 12 pounds, charities need donors to stay for at least 12 months to break even. Yet industry attrition data consistently shows that 40 to 50% of face-to-face donors cancel within the first year, compared to 10 to 15% for donors recruited through warmer channels such as events or peer referral.

The Fundraising Regulator's casework for 2024/25 recorded 1,284 cases about charity fundraising, with telephone and door-to-door methods continuing to generate disproportionate volumes relative to their share of total fundraising activity. The Regulator's investigation into data-sharing practices after the Olive Cooke case led to significant restrictions: the Fundraising Preference Service, launched in 2017, allows individuals to stop contact from specific charities, and processed over 19,000 requests in its first year of operation.

The Institute of Fundraising's 2018 Rule on Commission-Based Payments tightened guidance, stipulating that commission must not be the sole payment method for professional fundraisers where it could create a "significant risk of the fundraiser behaving in ways that could be detrimental to the interests of donors or potential donors." However, the rule stopped short of banning commission outright, recognising that the economic model of outsourced fundraising often depends on it.

Research from the Third Sector Research Centre at the University of Birmingham found that public attitudes toward face-to-face fundraising are more nuanced than the "chugging" narrative suggests: while 63% of respondents found street fundraising annoying, 38% acknowledged it as an effective way for charities to raise money, and 17% had signed up to a regular donation through face-to-face contact.

Current context

The commission-based fundraising landscape has changed substantially since 2015, though the underlying debate persists. Several of the largest face-to-face fundraising agencies in the UK have moved away from pure commission models toward blended payment structures that combine a base salary with performance bonuses, reducing the incentive pressure that drove the worst practices.

The Fundraising Regulator's Code of Fundraising Practice, last updated in 2025, requires charities to take reasonable steps to ensure that fundraisers acting on their behalf treat donors fairly, and specifically addresses the risks of commission-based payment. Charities must monitor agency performance not just on sign-up volumes but on complaint rates, cancellation rates, and mystery shopping outcomes.

The commission model has also surfaced in new forms. In 2024, Plinth — an AI grant-writing platform — launched a no-win, no-fee model charging 2% of successful grant values. The announcement drew immediate sector criticism, with concerns about whether AI tools should operate on commission structures at all. In practice, the debate was settled by the market rather than the regulator: charities showed little interest in the commission option, and Plinth quietly dropped it within months, moving to a flat subscription fee instead. The episode illustrated both the enduring sensitivity around commission in any form and the gap between theoretical controversy and practical demand.

The COVID-19 pandemic accelerated a pre-existing shift away from face-to-face fundraising toward digital acquisition channels. Many charities that paused street and door-to-door fundraising during lockdowns found that digital regular giving recruitment, while lower in volume, produced donors with significantly better retention rates. The post-pandemic recovery of face-to-face fundraising has been partial rather than complete.

The Charity Commission's annual return now requires charities to report on their approach to fundraising, including the use of professional fundraisers and any fundraising complaints received. This transparency requirement, introduced under the Charities (Protection and Social Investment) Act 2016, has made the use of commission-based agencies more visible to the public and regulators alike.

Last updated: April 2026

What this means for charities

Charities considering commission-based fundraising face a decision that is financial, ethical, and reputational in equal measure. The model can work, but only when managed with genuine rigour.

The charities that use outsourced fundraising well tend to share several characteristics. They set clear quality standards in agency contracts, including maximum complaint rates and minimum retention periods before full commission is paid. They invest in monitoring, including unannounced mystery shopping and regular review of cancellation data. They treat the agency's fundraisers as representatives of the charity, not arms-length contractors, and they take responsibility when things go wrong.

The charities that come unstuck are typically those that outsource both the fundraising and the oversight. Signing a contract with a fundraising agency and waiting for the direct debits to arrive, without scrutinising how those sign-ups were obtained, is a governance failure. Trustees have a legal duty under the Charities (Protection and Social Investment) Act 2016 to ensure their charity's fundraising is carried out in a way that protects donors, especially those who may be vulnerable.

The longer-term strategic question is whether commission-based models remain the best investment. With digital channels offering lower acquisition costs and better retention for many charities, and with public sensitivity to aggressive fundraising still high, the case for diversifying recruitment methods has never been stronger.

Common questions

Is face-to-face fundraising still legal?

Yes. Face-to-face fundraising remains legal and widely practised in the UK. Local authorities may regulate where and when it takes place through site management agreements, and the Code of Fundraising Practice sets standards for how fundraisers must behave. The Fundraising Regulator does not license individual fundraisers but can investigate charities that fail to meet the Code's requirements.

Can charities pay fundraisers on a pure commission basis?

The Code of Fundraising Practice does not ban commission-only payment, but it requires that payment structures must not incentivise behaviour detrimental to donors. The Institute of Fundraising's 2018 guidance states that commission should not be the sole payment method where it creates significant risk. In practice, most major fundraising agencies now use blended models combining a base wage with performance elements.

What happened after the Olive Cooke case?

Olive Cooke's death in May 2015 led to the Etherington Review (September 2015), which recommended replacing the self-regulatory Fundraising Standards Board with an independent Fundraising Regulator. The Regulator was established in July 2016. The Charities (Protection and Social Investment) Act 2016 gave statutory force to several of its functions, including a requirement for charities to report on their fundraising practices. The Fundraising Preference Service was launched in 2017 to give individuals control over charity contact.

How do I stop charities contacting me?

The Fundraising Preference Service, run by the Fundraising Regulator, allows anyone to stop direct marketing from specific charities. You can register at fundraisingregulator.org.uk. You can also register with the Telephone Preference Service (TPS) to reduce unsolicited calls, and the Mail Preference Service (MPS) to reduce direct mail. Under data protection law, you have the right to object to processing of your personal data for direct marketing purposes, and charities must comply.

Are telephone fundraising agencies regulated?

Yes. Telephone fundraising on behalf of charities must comply with the Code of Fundraising Practice, the Privacy and Electronic Communications Regulations (PECR), and the UK GDPR. The Fundraising Regulator can investigate complaints about telephone fundraising, and the Information Commissioner's Office (ICO) can take enforcement action for breaches of data protection and electronic communications law.

What should I look for if a charity asks me to set up a direct debit on the street?

The fundraiser should clearly identify which charity they represent, explain the commitment you are making, give you time to consider without pressure, and provide written confirmation of the direct debit terms. They should not follow you, block your path, or make you feel unable to walk away. If you feel pressured, you can report the interaction to the Fundraising Regulator. You have the right to cancel any direct debit at any time by contacting your bank.

Key sources and further reading

• Regulating Fundraising for the Future (Etherington Review) -- Sir Stuart Etherington, NCVO, September 2015. The independent review that recommended creating the Fundraising Regulator and overhauling fundraising self-regulation.

• Charities (Protection and Social Investment) Act 2016 -- UK Parliament. Gave statutory underpinning to the Fundraising Regulator and introduced new reporting requirements on fundraising practices.

• Code of Fundraising Practice -- Fundraising Regulator, updated 2025. The standards framework governing all charitable fundraising in England, Wales, and Northern Ireland.

• Public Trust in Charities 2025 -- Charity Commission / Gov.uk, July 2025. Data on public attitudes toward charity fundraising and the factors driving trust and distrust.

• Fundraising Regulator Casework Insights and Trends 2024/25 -- Fundraising Regulator. Breakdown of casework by fundraising method, including telephone and face-to-face channels.

• Critical Fundraising: Exploring the Ethics and Effectiveness of Fundraising -- Rogare, the Fundraising Think Tank, 2017. Academic analysis of the ethics of commission-based fundraising and donor acquisition models.

• The Fundraising Preference Service -- Fundraising Regulator, launched 2017. The mechanism allowing individuals to stop contact from specific charities, established as a direct response to the Olive Cooke case.

• Institute of Fundraising Rule on Commission-Based Payments -- Institute of Fundraising, 2018. Guidance on when and how commission payments to professional fundraisers are appropriate.

• Public Attitudes to Street Fundraising -- Third Sector Research Centre, University of Birmingham. Research on the gap between public irritation with face-to-face fundraising and acknowledgement of its effectiveness.