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For-Profit Fundraisers Rip Off Non-Profits and their Donors

Jim Burroway

July 6th, 2008

Private, for-profit companies which contract their services to non-profit organizations for fundraising have become a major rip-off, according to the Los Angeles Times this morning.

For-profit campaigns, which often employ telemarketing, mass mailings or one-time events, account for a small fraction of $223 billion in charitable giving each year in the United States. But they collect significant sums and help shape public perceptions of charities. Pairing computer-controlled dialing systems with low-wage workers, such firms can reach a large number of people in a short time.

But after these companies bills are paid, what’s left over? Often nothing. And yet the fundraising business is growing. Since 2000, the number of campaigns and amounts raised by for-profit firms has risen by about two-thirds in California alone.

To see how did your favorite LGBT charity do in California, here’s the list. GLAAD did the best, keeping a little over 70¢ of every dollar collected. Lambda Legal was very close behind at nearly 68¢. The Gay and Lesbian and Straight Education Network appears on the list twice, once under its full name, and once again under its initials. Combined, the two entities kept a little more than 59¢ of every dollar earned. Losers include the Horizon Foundation (8.6¢ of every dollar) and NGLTF (13.5¢ of every dollar, when combined with the NGLTF Foundation).

There is one caveat to these figures — they do not include fundraising which is conducted in-house.

Comments

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Scott
July 7th, 2008 | LINK

“Donors”, Jim.

Johno
July 7th, 2008 | LINK

Thanks for that link, I’ve been using this one as well:

http://www.charitynavigator.org/

It isn’t very kind to The Trevor Project also, which was disappointing to see.

Robguy
July 7th, 2008 | LINK

A group in Madison Wisc tried that one year. If you didn’t answer the phone and wait a considerable period for a minimum wage operator to get around to you – they’d keep calling and putting you on hold. I figured any non-profit that was stupid enough to hire a group like that didn’t deserve to get any money from me.

Samantha Davis
July 8th, 2008 | LINK

Absolutely criminal.

Of course there is always a silver lining. I couldn’t help but notice the Concerned Women For America Education And Legal Defense Fund only got a 6.6% return.

Mike A
July 9th, 2008 | LINK

I believe it’s naive to suggest that for-profit fund-raising is merely a ripoff.

As I suggest at Truth Wins Out, this tactic is a successful method for political non-profits to abuse their tax-exempt status and channel donations to blatantly partisan campaigns that happen to be operated by the for-profit telemarketer.

This tactic also intentionally diverts charitable donations that were intended for antigay/antiabortion advocacy into advocacy by the telemarketers for issues that might offend donors, such as free trade, tax breaks for gaming and tobacco industries, and anti-environmental causes.

Concerned Women for America, for example, launders more than 93 percent of its charitable telemarketing solicitations, via marketing consultants, into Republican national political campaigns.

Ralph Reed and the American Family Association have previously been caught laundering donations into pro-gambling advocacy.

Money-laundering by charitable organizations and their telemarketers is, often, no accident.

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