State Officials Say Fund Raisers Pocketed Most Charitable Proceeds

December 29, 2008

State Officials Say Fund Raisers Pocketed Most Charitable Proceeds

Attorneys general in California and Massachusetts have released reports showing that professional solicitors pocketed much of the money they raised.

The California report says that professional solictors sent less than half of the money raised in the state in 2007 to charity and kept the remainder, reports the Associated Press.

The report says that 44 percent of the $162-million raised was actually given to charity. Professional solicitorsreceive a percentage from each donation or a flat fee. In some instances, fund-raising costs exceeded the amount raised for charity.

The state attorney general’s office in Massachusetts says almost two-thirds of all charitable donations collected in Massachusetts were directed to professional solicitors instead of benefiting charities, reports The Boston Globe.

Out of $284.5-million raised in 621 campaigns, $100.8-million went to the charities, according to the report, which is conducted annually.

(Free registration is required to view the Globe article.)

Comments

You would do your online readers a service by making a distinction between non-profit employees who are fundraising executives and companies such as those in your article. The vast majority of non-profit fundraising employees are paid salaries by their organizations and do not take a percentage of dollars raised. The professional solicitors noted in this article are a separate breed entirely.

— non-profit fundraising executive Dec 29, 02:56 PM #
The headline for this story is seriously misleading. “Charitable Proceeds” in Massachusetts, California, and for that matter, the rest of the US, vastly exceeded the amounts raised under contracts between commercial fundraising outfits and their clients. Further, many of those clients are not “charities” in the sense most people understand. There may be serious questions that need to be asked about some of these campaigns, but the discussion is not advanced by scare headlines based on aggregate data.

— Putnam Barber Dec 29, 03:05 PM #
It’s the reason I let my membership in a well known national environmental organization lapse a year or so ago. I was called (at 10pm!) and told that funds were desperately needed right away. I had just made my annual gift, so I begged off and then backtraced their phone number from their incoming call and found out they were a for profit “fundraising” organization (the caller didn’t identify himself). A little Googling turned up various state charity registration office records showing that upwards of 94% of the proceeds raised by this firm went to the for profit firm. I was FURIOUS. I’m a non-profit fundraising professional — the vast majority of us engage in ethical philanthropy. This kind of sweat shop calling is unacceptable.

— Turned off by the backstory Dec 29, 03:17 PM #
This is nothing new. As one of those “professional” solicitors 25 years ago, I was appalled to discover that less than 20 percent of the money we were raising was going to the charity.

What disburbs me most about these deceptive practices is that the charities agree to these terms in the first place. Many of the soliciting companies are hired by the charities to raise funds — at any cost!

— Kevin Feldman Dec 29, 03:20 PM #
The report showing details is located here.
http://ag.ca.gov/charities/publications/2007cfr/cfr2007.pdf

— Rob Perhamus Dec 29, 03:44 PM #
Most all agree that these findings cast appropriate doubt and concern upon charitable giving. While it may seem distasteful, donors who read these are just as well served by knowing the names of the the non-profits that contract with such firms. They are a willing partner and their ethics should be called into question as much as the ‘fund raisers’.

— Tim Deuitch Dec 29, 03:59 PM #
As an independent advancement consultant in solo practice in New York City, I am sometimes surprised at the high fees charged by large fundraising-consulting firms relative to meager results. What’s truly appalling, however, is the occasional reluctance of the big firms to be honest with clients whose fundraising goals far exceed their capacity. If I had to name one reason why I’ve stayed in business successfully for 10 years, it would have to be having enough common sense to help my clients determine realistic fundraising goals, while politely declining to support campaigns in which I can have little confidence. I would rather give free advice to folks who cannot afford to hire me now than to take pay checks based on wishful thinking.

— Ruth Conner Dec 29, 03:59 PM #
The police, fire, and veterans groups which employ commercial solicitors are notorious for failing to concern themselves with fundraising best practices or donor confidence in the nonprofit sector. As the AP article states, and the Chronicle fails to note, the focus of the AGs’ reports is on “commercial” fundraisers—not development officers of conscientious charities or their volunteers. The sad irony is that too many “small” charities still complain that they can’t afford a salaried fundraiser. Of course in that case, the organization can’t “afford” to pay for any development activity. They should rely on their dedicated volunteers who will not only help generate revenues and other resources, but will demand accountability and transparency for the organization.

— nonprofit.esq Dec 29, 04:12 PM #
As a member of AFP (Association of Fundraising Professionals) and working as a professional fundraiser in a 501 c 3, Human Services agency in Massachusetts, supporting children and adult with develoipmental disabilities, it is completely unethical (and goes against the professional AFP Code of Ethics) to take any percentage of any funds raised and this one of the main differences between hired guns and true ethical professionals working to raise funds for charity…. *Note see AFP’s Code of Ethical Principles and Standards of Professional Practice, “Compoensationstandards: 16 – 18

— Doug MacPherson Dec 29, 04:32 PM #
The Chronicle has amended the post to make clear that the reports refer to professional solicitation companies hired by charitable organizations. We apologize for any confusion caused by the use of the term fund raiser.

— The Editors of The Chronicle of Philanthropy Dec 29, 04:42 PM #
I have worked as the Labor Liaison with a local United Way for 21 years.
Giving contributions to local community based organizations is the most effective way to make your charitable contributions have an impact.

— Alan Vandersloot Dec 29, 06:52 PM #
I agree. I was appalled by the title when it came up on my Google news alerts. As a professional fundraiser I had the sense to realize what the headline means but the casual reader would not. It is disappointing that the Chronicle of Philanthropy would use such a headline in today’s electronic age when articles are easily accessed by anyone, subscriber or not.

— Maria Dec 30, 11:43 AM #
It’s funny how fundraisers run for cover when the underbelly of our profession is exposed. However reprehensible, many non-profits are doing very nicely from the efforts of these companies. How about we look at the ROI and CTRAD on acquisition mailings. Is an average 2% response rate ethically acceptable?

— David Jan 2, 08:28 PM #

Commenting is closed for this article.

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