Telemarketers Keep Most of the Money They Raise for Charity, 2 States Report

Two new reports by state regulators show the share of proceeds that charities receive when they hire professional solicitors to seek donations in their behalf:

* In Connecticut, telemarketers that ran fund-raising campaigns in behalf of Connecticut charities last year kept two out of every three dollars raised.

* In Ohio, professional solicitors — telemarketers and other types of fund-raising companies — gave charities less than one-half of the money they raised.

Both studies were based on financial information that professional fund-raising companies are required to submit to the states, including how much a company keeps from each fund-raising campaign to pay its own expenses.

There are no state or federal minimums for how much professional solicitors must pass to charities, but watchdog groups and other consumer advocates typically say that the solicitors should give charities at least 65 cents of every dollar raised.

Companies that ran campaigns last year for Connecticut charities raised a total of about $9-million. Of that, roughly $3-million, or about one-third, reached the organizations that the donations were meant to support. The proportion of money that went to the charities was up slightly from 1997, when nearly 32 per cent of the total amount raised was passed to the organizations.

The share of money that goes to charity may be on the rise, but fewer and fewer Connecticut charities are using telemarketers to run campaigns. Last year, 104 charities hired solicitation companies, compared with 172 charities that did so a decade ago.

As in past years, police- and firefighter-related organizations in the state were the most likely to hire professional fund-raising companies. Money raised in behalf of those groups accounted for all but $1.6-million of the total amount collected.

The Ohio report covers 487 fund-raising campaigns run by professional companies to solicit Ohio residents, regardless of whether the donations were intended for charities based in or out of the state. Those campaigns raised a total of $103.6-million. Of that, $47.4-million, or nearly 46 per cent, was sent to various charities.

In about two-thirds of the campaigns, however, no more than 28 per cent went to charity, according to the report. In nine of those cases, charities received nothing.

The average amount that charities did receive in 1998 — 27.9 per cent — was up slightly from the previous year when 26.2 per cent of the campaign money, on average, was passed to charity.

Free copies of the Connecticut report, “Annual Report on Paid Telephone Fund-Raising in Connecticut — 1998,” can be obtained from the Office of the Attorney General, Seventh Floor, Attn: Telephone Report, 55 Elm Street, Hartford, Conn. 06106.

For free copies of the Ohio report, “Charitable Fund Raising in Ohio by Professional Solicitors, 1998 Report,” contact the Office of the Attorney General, Charitable Foundations Section, 30 East Broad Street, 17th Floor, Columbus, Ohio 43215; (614) 466-3180. Copies of the report are also available under the publications section of the Attorney General’s Web site at http://www.ag.ohio.gov.