Michael O’Farrell
Investigations Editor
THE Irish Mail on Sunday can today reveal how Ireland became the financial hub of a global charity collection empire about which auditors, revenue authorities and charity regulators in three jurisdictions have expressed concerns.
The Generous Global Giving Network, a group of fundraising companies spanning three continents, is the brainchild of Austrian citizen Andreas Leitner (pictured right). The GGG Network says it is ‘the world’s largest fundraising agency’.
One GGG Network firm is Red Fundraising Ltd, an Irish company that an undercover MoS investigation last week exposed as using cynical and manipulative tactics to solicit donations. Collectors, known as ‘chuggers’, operate on busy streets or by calling door to door.
As a result of the revelations, Action Aid Ireland immediately cancelled its contract with Red Fundraising, saying it was appalled at how it had been represented by Red.
Many of the firms in the GGG Network, which was established in February 2014, were originally incorporated by Mr Leitner. Others appear to be otherwise closely associated with him.
The ambitious aim of the GGG Network is to achieve ‘one million regularly-giving donors per year’ – a target that would involve hundreds of millions in annual revenue.
But today an MoS investigation can today reveal how: ? The auditors of Mr Leitner’s Irish parent company repeatedly refused to give the firm’s accounts the all-clear.
One Leitner firm was investigated in the US over allegations it broke fundraising laws.
Irish charities and other creditors lost more than €700,000 when an Irish firm part-owned by Mr Leitner went into liquidation last summer.
A UK Revenue investigation found employee PRSI payments were not properly accounted for by one of Mr Leitner’s UK firms, potentially depriving workers of vital benefits.
Mr Leitner, acknowledged by many to be the godfather of chugging, developed the practice 25 years ago while working for Greenpeace in Austria. He quickly expanded, establishing a growing group of companies initially controlled from the UK under The Dialogue Group umbrella.
These companies – including firms in Ireland, the UK, the US, Australia, Austria and Germany – pioneered the solicitation of regular direct debit contributions from donors.
This way of fundraising has become vital to many charities. As the donors are secured, they tend to leave their direct debits in place for many years, guaranteeing the h i d d i charity a secure and steady income.
What many donors do not know, however, is that companies such as those in the GGG Network often charge a fee for each donor recruited that can amount to as much or more than the first year’s donations.
These fees have allowed Mr Leitner’s firms to generate millions. But from the beginning there have been concerns – expressed by auditors in Ireland, Revenue authorities in the UK and fundraising regulators in the US – about how Mr Leitner’s companies were operating.
In 2005, Mr Leitner moved the group from the UK to Ireland for tax reasons and established a new parent firm, TDGI Ltd, with an address near Google in Dublin’s docklands.
However, from the moment the Dialogue Group’s base was moved to Ireland its auditors were not satisfied that incomes form abroad were being properly accounted for.
The TDGI accounts have been the subject of repeated warnings from auditors Grant Thornton from 2005 and each year thereafter until 2010.
Leitner encountered further controversy when his firm Dialogue Direct in the US was investigated by Washington State’s attorney general in 2010. Dialogue Direct agreed to pay a $10,000 fine rather than allow the case to go to trial. Because of this no admission of wrongdoing was made and no court finding was made.
The attorney general’s complaint alleged that the fundraising practices of the firm had ‘the capacity to mislead a substantial number of consumers and constitutes unfair or deceptive acts or practices in trade’.
These allegations are similar to some of the apparent malpractices exposed by last week’s MoS investigation into Red Fundraising in Dublin.
The MoS informed Mr Leitner about the matters contained in this article in recent weeks and asked him detailed questions about the nature of his relationship with GGG Network member companies.
