Paid Solicitors Pocket Major Portion of Proceeds Raised for Charity

Charities received only a fraction of the money raised last year in their behalf by professional solicitors, according to four new state reports.

In Massachusetts and New York, professional solicitors — telemarketers and other types of fund-raising companies — kept about two out of every three dollars they raised.

In California and Washington, the companies gave charities a bit more of the money, but still kept for themselves well over half of the proceeds.

The reports, issued by charity regulators in each state, are based on the financial information that telemarketers and other paid solicitation companies are required to submit to the states. The information includes how much a company keeps from each fund-raising campaign to pay its own expenses. Figures in the reports may include money raised in other states and in behalf of charities outside the state.

Of the four states that reported figures, professional fund raisers registered in New York returned the smallest overall share of their proceeds to charity. In New York, a total of $178-million was raised last year, with only $52-million — or 29 per cent — going to charity. And in one out of every four campaigns in the state, charities received 19 per cent or less of the money raised.

Among the key figures in the other state reports:

California. Professional solicitors registered in California raised a total of $196-million last year, according to the state’s report. Of that money, nearly $86-million, or about 44 per cent, went to charity. Still, many charities that hired fund-raising companies received much less. Of the 544 commercially run fund-raising campaigns in California last year, 149 — more than one out of four campaigns — gave 15 per cent or less of the proceeds to non-profit groups.

Massachusetts. Of the $105-million raised in the 370 campaigns that were registered last year, a total of 35 per cent — or $37-million — went to charity. On average, each campaign returned 26 per cent of its proceeds to charities.

Washington. Paid solicitors last year turned over to charities a total of $94-million, or 42 per cent of what was raised. That was up from 1997, when charities received 33 per cent of the money. In both years, however, more than a third of the solicitation companies gave charities 20 per cent or less of the money raised in their behalf. And last year, 7 of the 80 solicitors operating in Washington provided their charity clients with 10 per cent or less of the money.

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

Free copies of the California report, “Charitable Contributions by Commercial Fundraisers: Summary 1999,” are available at the state Attorney General’s Web site: http://caag.state.ca.us/publications; or contact the Attorney General’s office at (916) 322-3360.

Free copies of the Massachusetts report are available from the Attorney General’s Division of Public Charities, 14th Floor, 1 Ashburton Place, Boston 02108; (617) 727-2200 or send an e-mail to carol.aloisi@ago.state.mass.us.

Free copies of the New York report, “Pennies for Charities, Where Your Money Goes: Telemarketing by Professional Fund Raisers,” are available at the state Attorney General’s Web site: http://www.oag.state.ny.us/charities/charities.html; or contact the Attorney General’s office at (518) 474-7330.

For a news release on the Washington report, go to the Secretary of State’s Web site: http://www.secstate.wa.gov/news/news99/bh99.htm. The release includes links to more detailed information on the solicitation companies included in the study. For more information call the Secretary of State at (360) 753-7115, ext. 4, or send an e-mail to charities@secstate.wa.gov.