The charity millionaires

Sales teams at a packed Sydney conference centre are up on their feet, pulsing and gyrating as they devour the wisdom of the well-dressed man at the microphone.

 

The musical among them are belting out the chorus to a top 20-hit: “I wanna be a billionaire, so freakin’ bad.”

Those lucky enough to be near the front are in a mad, indelicate scramble for the stage: US dollar bills are literally raining into the crowd.

“If you want to party in France, if you want a Maserati, you gotta work it, bitch.”

That’s Paul Burkett, a near-deity, apparently, who then proceeds to drape himself in a gold necklace.

His audience is a crowd of hungry salesmen and women, including marketing teams engaged to fundraise for some of Australia’s biggest charities, like Camp Quality, the RSL, the Peter MacCallum Cancer Centre and the Special Olympics.

They are third party marketing contractors for a multinational company called Appco, a direct-selling empire that in two years alone made a staggering $100 million in commission from charity sales.

Burkett’s seduction continues: “I wanted to be the guy with all the money, the flash car, the McLaren…” And with a little hard work, and a little help from charitable Australians, many of Burkett’s dreams became a reality.

In 2015 he received a cheque from Appco in excess of a million dollars, as did a handful of other of Appco’s so-called ‘vice presidents’.

While a big portion of their income is derived from non-charity sales - everything from perfume to fresh food delivery products - the flamboyant Burkett is in many ways the totem for a broken fundraising system.

The third-party charity fundraising model in Australia is a sham.

No one can argue the enormous challenges facing charities in Australia when it comes to fundraising, and without street-level campaigns, desperately needed funds simply would never make it to those who need it.

But as our Sunday Night major investigation proves, something insupportable is happening across the country: the most munificent among us are being flagrantly and deliberately misled.

Donors aren’t being told that if they sign up for a 12-month donation, up to 93 per cent of that donation goes to Appco. To clarify, it is in the fine print of the donor agreement -- but you would fair dinkum need a magnifying glass to read it.

The collectors on the streets are more slippery than a squid in the pocket of a plastic raincoat. They’ll tell you, “100 per cent of everything you give goes straight into the bank account of the charity.”

What they don’t tell you, of course, is that there is a separate, back-end deal with Appco, and that the money comes back out in the form of a fixed-fee payment.

“You could lie and say you were a volunteer,” a former Appco-engaged contractor told Seven’s Sunday Night.

Ivan Alloshe worked his way up in the Appco empire to become an “owner-partner” level in the organisation.

Ivan Alloshe worked his way up to the 'owner-partner' level at Appco

“The reality is the amount of money that doesn’t go to the cause is unethical. The lure is money. A lot of people in the Appco world, including myself, compared themselves to Jordan Belfort from The Wolf of Wall St.”

You’d know them as chuggers, short for charity muggers. You might think they are working for the charity, but in reality they are Appco’s third-party marketing contractors, young Australians in their first job, or often backpackers, who work strictly on commission.

“I may have been earning three or four dollars an hour, which is crap,” says former fundraiser Tyrone Corbett.

Another marketer engaged to sell for Appco, Tegan Gregory, told Sunday Night: “It was to the point where, I thought, if I don’t make a sale, I won’t be able to eat tonight.”

“It’s become a joke, even joking about the charity. Saying, ‘ha, just got this one for $50’. You will see salespeople high-five after the donor leaves.”

Those claims of underpayment now form the basis of a class action against Appco.

More than a thousand workers say they were mistreated, and underpaid, and should have been treated as employees, not as “independent marketing contractors.”

They claim those who failed to hit sales targets were encouraged to engage in bizarre humiliation rituals, like slug races, ‘chicken fights’, and even simulated sex acts.

Lawyer Rory Markham is representing the workers in the class action.

“The organisation is exploitative and cult-like,” he told Sunday Night. There is a fanaticism around the endless profit drive that one could get if they ascend the pyramid structure.”

Rory claims the workers have been short-changed “in excess of $85 million”.

The dark genius of this fundraising model is the shattering silence from everyone involved.

The charities won’t say anything, because 10 per cent of something is better than 100 per cent of nothing.

Appco won’t disclose the details of its agreements with the various charities, because they are commercial and in confidence.

And perhaps worst of all is the jellied spine of the regulators in this space: amid a tangle of confusing state-based laws and the absence of any transparency, they’re free to go on doing nothing about it, spectacularly useless.

When it emerged that Appco fundraising for the Special Olympics resulted in a donation pool of $12 million, and that only four per cent of that -- yes, four per cent -- went to the Special Olympics, regulators spoke loudly about an inquiry, but then curiously abandoned it.

Appco affiliates are now back fundraising for the Special Olympics like nothing ever happened.

Appco declined to be interviewed on Sunday Night, instead sending out statements stressing that no laws have been broken, and that in 30 years there has never been an adverse finding against the company. When asked why so little of the money Australians donate actually makes it to the charities, Paul Burkett declined to comment too.

It should be said that it has helped raised many millions for the charities it represents.

But surely there’s a moral obligation here.

Surely someone has to speak up for the Australian donors, the unending source of wealth that’s keeping so many vital charities afloat.

Generous Australians who are treated with calculated contempt, told that the marketing fees are as low as nine per cent, when in reality they are more than 10 times that.

Sometimes, they are told by collectors that there is absolutely no marketing or administration fee at all.

The impassioned plea is the same from every person who’s spoken out about Appco: please, don’t stop giving, just be careful how you do it.

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