Articles like the one I read today in the New York Times make me nauseous.
I understand that fundraising costs money (we charge a fee of 10-14% of donations ourselves) but in many cases the telemarketing industry has done a horrible job of reducing costs to charities. We are obviously biased because we offer charities an alternative way to raise donations and I'm not condemning all telemarketers, but there are certainly a large number of them that should be ashamed of the numbers in this article and the New York State 'Pennies for Charity' report.
The flip-side: It is easy to vilify telemarketers for ugly results and high cost percentages. However, charities need to accept much of the blame as well. It takes two to tango. Data like this has been available for years. Charities should know what they are getting into when they agree to work with telemarketers. When considering a telemarketing campaign, charities are faced with a difficult decision. 'Would we prefer to get only 30% of donations, or no donations at all?' As the economy worsens and the pundits are predicting nothing but doom and gloom, more charities may make the decision to use telemarketing to supplement donations. This can be a short term solution that has consequences down the road as donors become disillusioned with charities that are willing to divert such a large percentage of donations to fundraising costs.
Telemarketers Take Hefty Share of Charity Dollars, Cuomo Says
By SEWELL CHAN
Published: December 30, 2008
On average, just 39 cents of every dollar raised by commercial telemarketing companies for charities in New York State actually go to charity, the state attorney general, Andrew M. Cuomo, concluded in a report issued on Tuesday. The balance, he found, is used to pay fees and expenses associated with professional fund-raising.
The report, issued by the attorney general's Charities Bureau, which oversees tax-exempt nonprofit agencies in New York, is intended to "help New Yorkers to make more informed decisions when giving to charities across the state," Mr. Cuomo said.
The report examined 553 fund-raising campaigns that were conducted in 2007 on behalf of 442 charities using telemarketers. The campaigns raised a total of $178.7 million. About 60.5 percent of the total, $108.2 million, was paid to the telemarketers as fees and other costs of the campaigns, leaving charities with less than 40 percent of the money actually raised for their causes.
"Especially in today's economy, when New Yorkers give their hard-earned money to charity, they expect the donation to make a difference and to help those in need," Mr. Cuomo said. "This report arms New Yorkers with the necessary knowledge to make informed decisions about contributing, and also encourages charities across the state to find more effective ways to raise money."
The report, "Pennies for Charity, Where Your Money Goes: Telemarketing by Professional Fund Raisers," summarized information filed with the Charities Bureau by professional fund-raisers who conducted telemarketing campaigns in 2007. Among the report's most significant findings:
- In nearly four-fifths of the campaigns, 436 of the553, the charities kept less than 50 percent of the funds raised.
- In nearly half, 271, charities received less than 30 percent of the funds raised.
- In nearly one-tenth, 51, the charities actually lost money.
- In only 45 of the 553 campaigns did the charity keep at least 65 percent of the money raised, the amount deemed acceptable under the Better Business Bureau's standards for charitable organizations.
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