Fundraisers generated $187.4 million from New York State residents last year. But only $63 million of that money was retained by charitable organizations, according to an annual report on fundraising by state Attorney General Eliot Spitzer.
The rest went to telemarketers or covered other costs, the report stated.
The Direct Marketing Association responded that fundraising costs are affected by many things, including testing and the cost of identifying new donors. In addition, some campaigns may have other goals than fundraising—for example, education or recruitment of volunteers—that may not be reflected in the charity’s revenue.
According to Spitzer, campaigns by the following fundraisers yielded and average of 12% or less for the charities:
*Telesytems Marketing Inc. (12%) *S & E Marketing Ltd. (11.47%) *American Trade and Convention Publications Inc. (11.24%) *Theodore Productions Inc. (10.26%) *Nationwide Fundraisers Inc. (10%) *Titan Marketing Inc. (10%) *LAS LLC (8.57%) *EARTHtel Inc. (minus 243.63%)
The report also noted that 31 organizations included in the report have had their registrations for failing to file a financial report for 2002 or before.
In addition, the report stated that charities retained at least 65% of the money raised in only 42 of the 592 campaigns reviewed. In 480 of the campaigns, the groups kept less than half of the money raised. Moreover, 18 charities lost money under their fundraising contacts.
“I urge charitable organizations to seek bids from several professional fundraisers to ensure that they get the best deal for their organizations so that their fundraising campaigns yield the most money possible for charitable programs,” Spitzer said in a statement.
The DMA concurred with that, but argued that “the decisions to work with a professional fundraiser must be based on the specific goals and objectives of the nonprofit, which may range from advocating, to raising funds, to building awareness, or even to educating the general public.”
Spitzer has proposed legislation to improve oversight of professional fundraisers and strengthen the anti-fraud statutes, but these measures have not been enacted.
“This annual report is a reminder of the need to make informed decisions before contributing hard-earned dollars to charity,” Spitzer said. “In addition, people who serve on charitable boards must be actively engaged in their organizations’ fundraising decisions. They have an obligation to ensure that their organization’s income for charitable purposes is maximized.”
