Percentage of Funds Pocketed by Charity Telemarketers Varies by State

While some telemarketers hired by charities are pocketing a larger percentage of the revenue they raise than they give to the charities, others are giving more than they keep, according to reports released by state regulators in California, Colorado, Massachusetts, and New York.

Among the telemarketers in each of the four states, those in Massachusetts kept the largest share of the money they raised. Telemarketers hired by nonprofit organizations kept an average of 71 cents of every dollar they raised, according to the state attorney general’s annual report on charity telemarketing. In 2003, the report said, 566 charity campaigns were conducted in the state by 84 telemarketers registered with the attorney general’s Public Charities Division. The report found that 38 percent of the charities received less than half of the money raised through the campaigns.

In New York, by comparison, telemarketers kept an average of 66 cents of every dollar, according to that state’s report. Only 33.7 percent — or $63-million — of the $187-million raised in 2003 in New York by independent fund raisers was given to the nonprofit groups that participated in the more than 500 charity campaigns, according to a study released in December by Eliot Spitzer, New York’s attorney general. In 2002, charities received a smaller percentage of the proceeds from such campaigns, 31 percent.

Brad Maione, a spokesman for Mr. Spitzer, said the percentage of donations given to nonprofit organizations may have increased because nonprofit groups are researching independent fund raisers more thoroughly and more carefully reviewing the contracts they sign with telemarketers.

The annual New York report has been conducted for the past 10 years to alert consumers to the cost of fund raising and related issues, said Mr. Maione. “People need to make informed decisions before contributing dollars to charity, and people on charitable boards need be more engaged in their organization’s fund-raising decisions.”

California and Colorado

Professional fund raisers in California kept an average of 62 cents on the dollar in 2002, according to a report by Bill Lockyer, the state’s attorney general. The report provided the most recent figures available and were consistent with findings from previous years.

In Colorado, paid solicitors kept 45 cents of every dollar raised, according to the latest annual report by the secretary of state’s office, which was reported in The Denver Post. The 55 percent of funds raised that went to charities is an increase from the previous year, when charity groups only received 41 cents on the dollar.

Some of the reports are available online. California’s report can be downloaded at http://caag.state.ca.us/charities/publications.htm. The New York report can be found at http://www.oag.state.ny.us/charities/pennies04/PenniesForCharity04.pdf.