For-Profit Fundraising Fleeces the Charitable

Phillip Reese and Andrew McIntosh of the Sacramento Bee report:

If you give to a charity over the phone, there’s a growing likelihood that most of your donation will go to the telemarketer instead, according to a Bee analysis of state records.

More than a third of California charity telemarketing campaigns sent less than 20 cents on the dollar to the charities during 2007, the most recent year on record. Those campaigns and a smaller number of charity auctions and concerts raised $93 million for commercial fundraisers, and just $3 million for the charities.

There are some eye-popping numbers in the report (PDF) released by the California Attorney General. The Bee points to the American Diabetes Association, where in California alone, commercial fundraisers generated $13,000,000 in donations at a cost of $17,000,000. That organization is an outlier, but other prominent charities had significant negative revenue using telemarketing and other commercially-operated fundraising.

The most effective for-profit fundraising was done on behalf of the Ronald Regan Presidential Foundation, with 92% of a $3,482,100 bounty going to the organization!

Since the creation of the Do-Not-Call Registry, many charitable organizations have resorted to in-person solicitation on the street. Is this more or less invasive than telemarketing? I’m not sure. But I am very skeptical of the eleemosynary nature of these groups. Several of the popular in-person solicitors work for child poverty organizations. I’m not sure about the actual names of these charities, but “Children International” raised $1,275,675 and ended up paying the fundraiser $614,850; and “Save the Children Federation” only kept $997 of $71,811 raised. In dead last for effectiveness is the “Children’s Defense Fund,” which paid the fundraiser $29,676 for raising $2,480.


  1. Erasmussimo

    Oh, wow! You got to use “eleemosynary”! I’m so jealous. It’s so rare to get an opportunity to use an inkhorn term without looking snooty.

  2. in the UK the term chuggers is used for the one the street bods who are normally commercial fundraisers and tend to be more on the aggressive side when trying to get donations.

    it can be quite amusing seeing them come up with a good excuse why you should sign up a direct debit with them on the street as opposed to direct on the charities website.

  3. The most effective for-profit fundraising was done on behalf of the Ronald Regan Presidential Foundation, with 92% of a $3,482,100 bounty going to the organization!

    Fitting. I’m sure the donors would praise the entrepreneurial genius of the fundraisers.

  4. Sari Everna

    I’ve spotted these guys at my university and while I didn’t know that they were part of for-profit fundraising until recently, I instinctively didn’t trust them. Who would when they set up in the bottleneck where many of the people coming and going from campus have to pass through and have people on both sides of the walkway on both ends? It just felt like a trap.

    But if I ever feel like messing with someone, I think I will do as kevin suggests and try to get an answer out of them. 🙂

    And now I need to look up eleemosynary.

  5. The “charities” think it’s a great deal. They expend no effort and get some money. I think the best solution to the problem is for the federal government to prohibit tax-exempt charitable organizations from hiring for-profit fund-raising companies.

  6. Sadly raising money costs money. The examples you’ve put are extreme, but it’s not uncommon for organisations to spend 40% of the cash they get back on either the wages of the fundraising method (street, phone, online or otherwise) or on hiring a registered agency to do it for them.

    Ultimately it’s the public’s fault: we don’t give easily. If we just looked up and signed up they wouldn’t need to spend so much. (the likes of justgiving is a good example) If charities didn’t have “chuggers” they’d fold and no good work would be done.

  7. I got a call nine days ago from a telemarketer soliciting funds for — well, first she called it “The Autism Foundation,” then the “Autism Spectrum Disorder Foundation.” I’d never heard of either before, so I hung up, started digging, and didn’t come up for air until yesterday afternoon, when I published this:

    Dialing for Autism Dollars

    P.S. re: eleëmosynary — great word, has a flavor; I like it even better with the diaresis.

  8. Fund raising take some entreprenerial thinking. Otherwise, fundraising campains can go into the negatives.

  9. Joe Mascott

    I recently was solicted to collect money for “Autism Spectrum Disorder Foundation”. This money was collected from my neighbors.

    Befor I release the money I want to be reasonably assured that this is a legitement foundation and that the money will go to the parents and children affected and not for administration costs.

    If you can’t answer the question perhaps you can direct me to a website that rates this organization.

    Thank you,

    Joe Mascott

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