Give to good causes, but not via telemarketers

What would charitable organizations and other non-profits do without the holiday season? Many groups bring in more donations during December than during any other month of the year. Without holiday giving, meeting basic expenses would be a challenge. If you get a mailing from a group you support, I encourage you to give what you can afford.

Responding to telephone solicitations isn't such a good idea, as Lee Rood reported in the Sunday Des Moines Register:

The vast majority of donations raised by phone or mail by professional fundraisers in Iowa winds up in the hands of professional fundraising companies, a Des Moines Register investigation found.

The Register's examination of more than 80 professional fundraisers serving more than 500 charities - often for little-known nonprofits but sometimes for well-known charities - also shows:

- The median percentage of proceeds that wind up with a charity is about 24 percent, according to reports to Iowa's attorney general by fundraisers that made disclosures in 2007. Just five charities received more than 75 percent of the proceeds from fundraising campaigns.
[...]
- About a half-dozen fundraising companies continue to do business in Iowa even though they have been subject to cease-and-desist orders, hefty fines and multiple court actions for breaking solicitation rules or financial disclosure laws, or for deceiving would-be donors. (See related article on this page.)

- Many of the charities that benefit from the fundraising are poorly rated by watchdog groups or give a tiny fraction to the individuals or groups that solicitors claim donations will benefit.

[...] documents filed with the state show Aria Communications, a St. Cloud, Minn., company that boasts it has an overall return of 77 percent to charities, actually charged two nonprofits more money last year than it managed to raise.

Aria raised $27,678 for the Sierra Club, but charged the California-based nonprofit $30,159 in fees and expenses, according to information the company filed at the Iowa attorney general's office.

The whole article and related sidebar are worth reading. If you want to support a group such as the Sierra Club, find the organization's address on the web or in the phone book and mail a check. That way your full donation will go to a good cause, instead of paying mostly for telemarketer fees.

Here's a link to the Charity Navigator website in case you want to look up a group before you donate.

Speaking of telemarketers, a funny story appeared in the Register a few days ago:

Gov. Chet Culver told Iowa school administrators a story on Monday about an experience he had with the New York Times early in his political career.

Culver, who ran for Iowa secretary of state in 1998, said shortly after he announced his candidacy, he received a telephone call from Bob Smith with the New York Times.

Culver said he was surprised a reporter from the newspaper was calling him when he hadn't yet done an interview with The Des Moines Register or other media outlets in the state.

Culver said he asked Smith if he could call him back, and the man said yes. The governor said he was relieved because it would give him more time to prepare for an interview. He asked Smith what he wanted to talk to him about.

"This is regarding your Sunday subscription to the New York Times," Smith told him.

Tags: charitable giving, charity, Chet Culver, Fraud, Iowa, non-profit organizations, Sierra Club, telemarketers, telemarketing (all tags)

Comments

6 Comments

Re: Give to good causes, but not via telemarketers

The story about Chet Culver reminds me of this clip from Seinfeld:

http://www.youtube.com/watch?v=45eHfCQIf 6w

Thanks for posting on the telemarketers. While I don't want to take any money away from someone who is working, even on the phones, the we reason we donate is to give to the charity, not to the middleman.

In campaigns, I've worked with professional fundraisers who take a percentage of what they generate. This arrangement has been very good for both parties.

by dannybauder 2008-12-14 11:48AM | 0 recs
Re: Give to good causes, but not via telemarketers

If the caller notifies me that the "call will be recorded for quality control purposes", then I know that they are from a separate company employed to raise money for the organization and have no qualms being curt with them and hanging up in less than 3 seconds.

Usually I hang on long enough to determine whether it's a volunteer - they don't deserve rough treatment.

by PeterB 2008-12-14 12:31PM | 0 recs
Another Perspective

Evalulating a charity requires more than either a) telemarketing or not and b) numbers and ratios.  Those are the means used by Charity Navigator and others that "rate" charities.  Those means tend to favor large established charities, such as the American Cancer Society, that have huge endowments, get a lot of bequests, and do not have to use telemarketers.  It disfavors smaller, more focused, charities, and those just getting started.

A better way to evaluate a charity is by how much good it does.  If it does a lot of good, and has limited means for fundraising, I might well choose to bear the 70% cost of telemarketing, knowing that 30% of my gift is actually doing some needed good work that might well not be funded otherwise.  Besides, how has that war-on-cancer worked out for the American Cancer Society for these last 45 years it has been raising huge funds?

Another perspective is to look at it from the recipients' viewpoints.  There are a number of gift-granting charities that use telemarketing and therefore have high costs of fundraising or bad "ratios".  Maybe I don't want to give ten dollars to them, knowing that eight will pay for telemarketing.  But, look at it from the perspective of the mother whose dying daughter who had wanted to be a marine biologist but instead died of a brain tumor, but had granted her dying wish to swim with dolphins before she died. Do you think that mother cares about the costs of telemarketing?  As a donor, it sometimes helps to put your self in the shoes of the recipient.

Finally -- Senator Grassley, please take note -- remember that telemarketing is a source of employment of nearly last resort for a lot of people.  One needs to be close to desperate to take a low-paying job in which nine out of ten people hang up on or swear at you.  Your donor dollars that go to telemarketing are not dollars down the drain. There are many thousands of people who, especially in these times, need that second parttime job, no matter how hard and low-paying it may be.

Progressives I know have empathy and the ability to look at issues while standing in the other person's shoes.  We should do no less when it comes to evaluating charities.

by Arthurkc 2008-12-14 01:28PM | 0 recs
I take your points

Most of my giving goes to small local organizations, with minimal staffs, rather than to large groups. In some cases I know either a staffer or one or more board members personally, and I know exactly what the group does in my own community.

I tend to stay away from giving to the largest organizations with big endowments, such as United Way.

While everyone has to make a living, including telemarketers, I still feel that if I donate to the Sierra Club, I don't want half the money or more to go to the telemarketing firm paying its employees a lousy salary with no benefits.

by desmoinesdem 2008-12-14 04:41PM | 0 recs
Re: Give to good causes, but not via telemarketers

Thanks for this post!  To research charities, there's also http://www.greatnonprofits.org/ where you can read reviews of nonprofits. The reviews are written by people with first-hand experience with the nonprofit - their clients, volunteers, board members, donors.

Perla Ni   
CEO   
GreatNonprofits.org

by perlani 2008-12-14 03:38PM | 0 recs
Speaking as a professional fundraiser ...

... the necessity of bringing in professional expertise to raise revenue, particularly for a large, national non-profit, is often imperative. That said, here are some thoughts ...

- The problem you get, as seems to be the case with these instances, is that the fundraisers are tacking on an assortment of additional costs that are hidden in the agreement between the group and eat away at the revenue raised for the organization. That or some fundraisers, particularly telemarketing types, opt for a cut of the total raised which, personally, I think is somewhat unethical.

- Most phonebanking efforts to raise funds aren't terribly effective with most organizations raising money via grants or a collection of large donors. It's more of a marketing effort designed to promote the organization and identify future donors who can be repeat givers (and at larger amounts). Direct mail and phonebanking typically are break-even ventures based on an assortment of other costs.

- Most non-profits build the cost of consultants into their annual budget, meaning it's not entirely accurate to compare revenue raised from one fundraising campaign with the expenditure made on said consultants. I point this out because one of my clients has been able to focus more of its time on identifying grants, growing their board of directors and program-building, which has dramatically increased their yearly fundraising. In turn, my efforts help to compliment their annual giving campaign and subsequent direct mail efforts, though those fundraising totals remain rather even. The point being they're able to increase efficiency and bring in additional revenue they hadn't been able to tap due to previous time constraints.

- Telemarketing firms, as a whole, aren't terribly effective. Phonebanking run by volunteers is a more effective method, though it's more time-consuming.

by Safe As Houses 2008-12-14 04:03PM | 0 recs

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