Solicitors Keep 62% of Gifts, New California Study Finds

Only 38 percent of donations raised by commercial solicitors in California fund-raising campaigns in 2001 went to charities, the state’s attorney general said in a new report.

The remainder of the money went to cover fund-raising companies’ expenses and for their profits.

In 2000 charities received 34 percent of the money collected on their behalf.

Of the 420 campaigns staged in California in 2001, more than one-fourth (110) turned over to charities 15 percent or less of the money raised.

In slightly more of the campaigns (123), the charities received more than half of the contributions.

Attorney General Bill Lockyer said in a press release that the report, the state’s latest on the solicitation industry, shows that “many California charities earn a poor return on their investment in commercial fund-raising operations.”

Critics of the annual reports issued by many state attorneys general argue that they are deceptive because they don’t distinguish among various types of campaigns.

For example, charities sometimes hire commercial solicitors to seek out new donors to be added to a nonprofit group’s list of likely contributors to be contacted in the future, knowing that such campaigns will generate little if any money for the charity’s current fund-raising drive.

The attorney general is “focusing on the fund-raising ratio as if it alone could tell you there’s fraud going on,” said Louis Mastria, spokesman for the Direct Marketing Association. “That’s not the case.”

The attorney general’s report on 2001 donations is available online at http://www.ag.ca.gov/charities/publications.htm.