Over the past three years, the telemarketing company Tønsberg Kundeservice DA has had an average annual revenue of just under 14 million. The company conducts fundraising on behalf of two nonprofit organizations: Ivareta—for family members affected by substance abuse (formerly the National Association Against Substance Abuse)—and the National Association for Victims of Violence. These two organizations have now been placed on the OBS list due to their extremely low fundraising rate.

Tønsberg Customer Service offers completely ordinary products at significantly inflated prices, such as copy paper and “Christmas gift sets” containing mulled wine, gingerbread cookies, and candy. To use the names of the two organizations in their sales efforts, a fixed annual commission of 550,000 (Ivareta) and 520,000* (LFV) is paid. Total sales for 2017 were 8,000,799 kr. for Ivareta and 5,127,599 kr. for the National Association for Victims of Violence. Tønsberg Customer Service thus generates a surplus in the millions for its owners. Charity Monitoring Norway has no indication that donors are informed about this distribution of revenue.

“Tønsberg Kundeservice’s operations are entirely legal. Nevertheless, we have serious concerns regarding both the ethical aspects of their fundraising practices and the business ethics of their business model. There is no doubt that the company would have had tremendous difficulty selling anything at all if it had not been able to operate under the guise of a nonprofit organization,” says Børre Hagen, executive director of Charity Monitoring Norway.

Charity Monitoring Norway has conducted a price comparison that shows the products are being sold at significantly inflated prices—typically 2 to 5 times the regular market price, with some even far exceeding that. One example is gingerbread cookies priced at nearly 1,000 kr. per kilo. It is obvious that the only motivation for purchasing the products on offer is to support a good cause. This is therefore considered a fundraiser.

The Fundraising Control Agency’s calculations show that Ivareta—Relatives Affected by Substance Abuse and the National Association for Victims of Violence had overall fundraising rates of 18% and 11%*, respectively, for 2017. This means that less than 20 kr. of every 100-lapp collected actually goes to the cause. Both organizations do important charitable work, but it helps very little when most of the money does not go to the cause. “In this case, the organizations have not been mindful of their responsibility. There is no doubt that donors expect a much larger percentage to go toward the cause than is the case here,” says Børre Hagen. By comparison, the average distribution rate among organizations approved by Innsamlingskontrollen was 77.5% for 2017.

In 2017, Tønsberg Kundeservice had total revenue of 13,163,607. Virtually all revenue comes from a total of four “business areas” distributed among the two organizations mentioned above:
Ivareta—relatives affected by substance abuse (formerly the National Association Against Substance Abuse): 5,513,899
Children in Substance Abuse Environments: 2,686,900 (business area under Ivareta)
National Association for Victims of Violence: 2,890,304
Stop Child Abuse: 2,237,295 (operational area under LFV)
That same year, the CEO earned a salary of 851,000, and the owners took dividends totaling over 2 million. Nearly as generous withdrawals are also found in the financial statements for the two preceding years.

*We have been informed by the National Association for Victims of Violence that they receive 100,000 in additional commission for the “Stop Child Abuse” fundraising campaign. However, this is not reflected in any agreement to which Charity Monitoring Norway has access. If this were the case, it would give the National Association for Victims of Violence a fundraising percentage of 14%.