Three New State Reports Show Results of Phone Drives

Three new state reports show that charities that have recently used telemarketers to solicit donations on their behalf have often received less than half the funds raised.

In New York, less than one-third of the money raised by professional telemarketing campaigns went to charitable groups, while the rest was paid to solicitors to cover their fees and other costs. Charities in Massachusetts got about half the money telemarketers brought in, and Colorado nonprofit organizations received an average of 40.9 percent of the money raised for them.

In New York, 607 telemarketing campaigns conducted for charity by professional solicitors in 2002 raised $184.3-million, according to a report by New York Attorney General Eliot Spitzer. Of that, $57.1-million, or 31 percent of the funds, was retained by the charities in whose names the campaigns were conducted.

The report also showed that in more than 78 percent of the telemarketing campaigns, charities kept less than half of the funds raised. In addition, 25 charities lost money under their fund-raising contracts.

Mr. Spitzer’s report identified nine professional fund raisers whose campaigns yielded the least amount for charity — on average 12 percent or less of the money raised.

The report, Mr. Spitzer said, shows that “the people who serve on charitable boards have an obligation to remain actively engaged in their organizations’ fund-raising decisions. Board members must take responsibility for the selection of professional fund raisers to ensure that their organization’s income for charitable purposes is maximized.”

The New York report cautioned that charities’ fund-raising costs could be affected by many factors.

For example, the report said that “identifying new donors may be more time-consuming and thus more expensive than contacting previous contributors.” Also, said the report, “an organization may conduct a telemarketing campaign to test-market new fund-raising ideas without any certainty that its campaign will prove efficient and productive.”

Massachusetts Report

In Massachusetts, charities received an average of 51 percent, or $115-million, of the $224-million raised by the 90 telemarketers that registered with the state in 2002, according to a report from the state’s attorney general.

In three out of every four charitable telemarketing campaigns, the charities netted less than half the money that was collected, the Massachusetts report says. The results were similar to those from previous years.

Telemarketers for police and firefighters in Massachusetts had some of the highest fund-raising costs, according to the report.

Charities that received less than 20 percent of donations from Massachusetts telemarketing campaigns included Amvets, in Lanham, Md., which received 13 percent, or $617,000, from a $4.79-million telemarketing campaign; Cancer Recovery Foundation of America, in Hershey, Pa., which brought in 17 percent, or $234,602, from a $1.34-million telemarketing effort; and the Committee for Missing Children, in Lawrenceville, Ga., which received 12 percent, or $45,774, from a $389,399 campaign.

Nonprofit organizations that received large shares of the charitable donations that telemarketers raised included the American Red Cross, in Washington, which brought in 92 percent, or $698,350, from a $754,973 campaign; Groundspring.org, in San Francisco, which collected 94 percent, or $290,678, from a $307,784 telemarketing effort; and U.S. Unicef Fund, in New York, which received 90 percent, or $127,432, from a $140,890 campaign.

Colorado Study

Of the $21.1-million that Colorado residents donated over the telephone to charity during a 19-month period in 2002 and 2003, $8.6-million was retained by charitable organizations. Telemarketers got $12.5-million, or 59.1 percent, of the money, according to a report from the Colorado secretary of state’s office. The report was the first to look at groups that raise money for charity in the state.

Some telemarketers in Colorado kept all the donations, while more than half — 39 of the 74 solicitors that registered with the state — kept 80 percent or more of the gifts, the Colorado report says.

Many of the telemarketers that kept more than 80 percent of donations for themselves represented groups of police or firefighters.

A copy of the New York report, “Pennies for Charity,” is online at http://www.oag.state.ny.us/charities/charities.html. Copies may also be obtained by contacting the attorney general’s Charities Bureau, 120 Broadway, New York, N.Y. 10271; (212) 416-8400.

To view the Massachusetts report, go to http://www.ago.state.ma.us/charity/telrep02.pdf. A copy also may be obtained from the Attorney General’s Division of Public Charities, 1 Ashburton Place, Room 1413, Boston, Mass. 02108-1698; (617) 727-2200.

For the Colorado report, go to http://www.sos.state.co.us/pubs/bingo_raffles/main.htm, then click the link to Charitable Solicitations, and then go to 2003 Annual Report. A free copy also may be obtained from the State of Colorado, Department of State, Civic Center Plaza, 1560 Broadway, Suite 200, Denver, Colo. 80202-5169; (303) 894-2200.

Grant Williams contributed to this article.