February 9, 2006 | Read Time: 3 minutes
Charities that rely on paid solicitors are getting mixed results, according to studies issued by regulators in four states.
In California and Colorado, the share of money that went to charities dropped, while in New York and Washington it increased slightly.
In California, companies raised more than $293.7-million in 628 fund-raising campaigns for charities in 2004, an increase of nearly 26 percent over the $233.2-million raised in 2003. While charities received more money overall — $143.1-million in 2004 compared with slightly more than $100-million in 2003, the share of funds solicitors passed along dropped to 36.5 percent in 2004, from 41 percent in 2003.
“The numbers continue to show that too many charities receive too few dollars when commercial fund raisers are employed to solicit donations,” said Bill Lockyer, the California attorney general, in a statement.
Concern about the amount of money passed along to charities prompted the state last year to pass a law requiring nonprofit groups and solicitors to draw up written contracts covering how much money each side will get.
California also orders companies to deposit money they raise into a bank account controlled by the charity within five days of receiving donations. The impact of the law on paid solicitors won’t be known for another year, when financial data for 2005 becomes available.
Gain in Donations
In Colorado, the share of money that solicitors passed along also dropped. The companies collected $164.3-million in 254 fund-raising campaigns last year, a 70-percent increase over the previous year. But charities received a smaller share, about 47.5 percent of total donations, on average, compared with 55 percent in 2004.
In New York and Washington States, charities received a slightly higher percentage of donations than they had in the past.
In New York, where 555 companies solicited donations on behalf of 440 charities in 2004, a total of $63.5-million went to charity, with an average of 37 percent of the amount raised passed on to each group. That was the highest share since 1995, when 38.1 percent was returned to charities. But the total raised was the lowest since 1997: $170.6-million in New York in 2004 compared with $187.4-million in 2003.
Eliot Spitzer, the New York attorney general, said in a statement that he believes his office’s efforts to educate the public about paid fund raisers has encouraged the companies to increase the amount to charity and also encouraged donors to give to charities directly rather than through solicitors.
In Washington, the 114 companies that solicited donations for charities received 50.1 percent, on average, of the amount raised in 2004. In 2003, charities received 49.2 percent. Total donations raised by commercial fund raisers in the state increased by about 20 percent, to $444.2-million in 2004, up from $368.4-million in 2003.
Direct-marketing officials say they are concerned by the approach the states take in their reports.
Senny Boone, executive director of the Direct Marketing Association Nonprofit Federation, in New York, says reports that only look at financial data do not always take into account the goals of the fund-raising campaign. She says that some campaigns, such as those that seek to attract new donors or those that focus on advocacy, often help charities advance their missions even though they cost more than a traditional telemarketing campaign.
Ms. Boone also says that different missions can be a factor in how much money is raised in a campaign. “You can have a campaign for widows and children of war versus a campaign for reformed pedophiles and have very different results,” says Ms. Boone. “A lot of subjective factors are not taken into account” in the state-issued fund-raising reports.
Copies of the reports can be found online at http://caag.state.ca.us/charities/publications.htm in California; http://sos.state.co.us/pubs/bingo_raffles/annual_reports.htm in Colorado; http://www.oag.state.ny.us/charities/pennies05/2005%20Pennies.pdf in New York; and http://www.secstate.wa.gov/charities in Washington.
