Commercial Solicitors Keep Most of Donations, 2 State Studies Find

By HARVY LIPMAN

Two new state reports show that charities that use professional solicitors often do not receive most of the funds solicited in their behalf.

According to reports filed with New York’s state attorney general, commercial solicitors kept more than 70 percent of the money they raised to cover profits and expenses.

And reports filed with state regulators in Washington show that slightly less than half of the charitable donations raised by such solicitors ended up going to charities. The Washington report was issued jointly by Secretary of State Ralph Munro and Attorney General Christine Gregoire.

The figures in both reports cover in-state and nationwide fund-raising campaigns, which raise money primarily through telemarketing. Both New York and Washington require professional solicitors to report the total amount raised across the country as part of any fund-raising campaign that seeks donations from residents of those states.

Campaigns run by professional solicitors who filed reports in New York raised $194.1-million in 1999. Of that, $55.3-million — or 28.5 percent — was turned over to the charities in whose names the campaigns were conducted. In Washington, professional solicitors reported raising about $223-million, of which $112-million was kept by the companies.

The New York report also found that one-fourth of the 581 campaigns conducted there turned over less than 20 percent of the amount raised to the charities in whose names contributions were sought. Many of the 104 fund-raising companies listed in the report conducted more than one campaign. Total amounts raised and distributed by each company show that 26 of them passed on 20 percent or less of the donations they received to the charities that hired them. Four gave their nonprofit clients 10 percent or less.

Washington’s report contains similar findings: Of the 90 solicitors covered by that state’s report, 23 turned over 20 percent or less to the charities. Six provided their clients with 10 percent or less.

Two companies in the New York report turned over less than 1 percent of what they raised to their clients: Tele-Data Services, in Houston, and the George Carden Circus International, in Springfield, Mo. Tele-Data Services’ clients were the Nora Lam Chinese Ministries International, a Christian group in San Jose, Calif., that engages in such activities as distributing Chinese-language Bibles in China; and the Messianic Jewish Alliance of America, a religious group in Springfield, Pa. The George Carden Circus International had one client: the Media Shrine Temple, a Masonic lodge in Watertown, N.Y.

InService America, in Lynchburg, Va., made the largest percentage payment to its charity client, passing on 95 percent to the Kennedy Krieger Institute, a Baltimore health-care facility that provides rehabilitative and other services for children.

Civic Funding Services, in Seattle, provided the lowest percentage of donations to its clients of any solicitor in the Washington report. It turned over just 1.8 percent of what it raised. Its clients included a local Jaycees chapter, a Veterans of Foreign Wars post, and charities run by police and firefighters. Working Assets Online, in San Francisco, paid the highest percentage to charities in the Washington report, passing on 97 percent of the money it raised to its sole client, eGrants.org, a nonprofit organization that raises money online for various charities.

Both reports are available free on the state agencies’ Web sites. New York’s report is posted at http://www.oag.state.ny.us/charities/charities.html. A copy of “Pennies for Charity” can also be obtained free by contacting the Attorney General’s Charities Bureau, 120 Broadway, Third Floor, New York 10271; (212) 416-8401. The Washington report is available at http://www.secstate.wa.gov, or by contacting the Secretary of State’s Charities Program, 801 Capitol Way South, P.O. Box 40234, Olympia, Wash. 98504-0234; (360) 753-0863.