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.