In a startling 176-page report released by New York State Attorney General Eric T. Schneiderman, revelations abound on exactly where consumer charity dollars are going.
Each December, Schneiderman’s office provides the public with concrete documentation in the form of a detailed fundraising report that describes how for-profit telemarketers pocket the lion’s share of contributions that New Yorkers pledge to a gamut of charities.
According to the report entitled, “Pennies for Charity, Where Your Money Goes: Telemarketing by Professional Fundraisers,” an average of just 36.5 cents of every charitable dollar raised by a variety of professional telemarketing companies actually made their way directly to the charity at hand. Evidence presented in the report asserts that these same telemarketers walked off with a whopping 63 percent of the money raised from unwitting contributors. Even more shocking, the report also presents statistics which show that many charities across the state of New York received even less direct funds, and in 61 of the 564 telemarketing campaigns, the charities in question actually lost money.
“The winter months are an especially difficult time for those in need, and thankfully, many generous New Yorkers are eager to extend a helping hand during the holiday season. That’s why it’s important for donors to know exactly how much of their money will be spent on charitable programs and how much will be used to pay for fundraising costs.” Attorney General Schneiderman said. He added that “my office wants to ensure that New Yorkers planning on making a charitable donation this year have the information they need to protect themselves and the people they aim to help. Especially in these tough economic times, the people of the state deserve to know that their hard-earned dollars are going where they are intended to go.”
Some of the significant findings regarding the 564 fundraising campaigns covered in the Attorney General’s report include the following: In 77 percent, or 435 of the 564 campaigns, the charities kept less than 50 percent of the funds raised. In 263, or 47 percent of the 564 campaigns, the charities retained less than 30 percent of the funds raised. In 61 of the 564 campaigns reflected in the report, charities actually lost money. In only 46 of the 564 campaigns did the charity retain at least 65 percent of the money raised, the amount deemed acceptable under the Better Business Bureau’s standards for charitable organizations.
Most recently, Mr. Schneiderman announced that he had successfully barred a Connecticut fundraising company and its owner from soliciting charitable contributions in New York State after fraudulently using telephone solicitations for over 30 public safety organizations. Moreover, the Attorney General also terminated the operations of the Long Island-based Coalition Against Breast Cancer (CABC) which solicited $9.1 million from the public over the past five years, but spent virtually no monies collected on the breast cancer programs it claimed it supported.
Last month, the operator of a bogus Long Island charity called Coalition for Breast Cancer Cures, was sentenced to 2 to 6 years in prison for absconding with over half a million dollars in donations intended for breast cancer treatment programs, and he and his wife were ordered to pay $1.5 million in restitution, as part of a settlement secured by Schneiderman.
The data in this report was obtained from financial reports filed with the Attorney General’s Charities Bureau by professional fundraisers that conducted telemarketing campaigns on behalf of charitable organizations. The filings are either closing reports submitted after completion of a telemarketing campaign or interim reports submitted annually for campaigns conducted for a period longer than one year. The figures reported reflect the total amount of money solicited and are not limited to New Yorkers’ contributions.
The Impact on Jewish Institutions
For those donors supporting Jewish charities, the report has produced some troubling findings. For example, a professional fundraising organization called Integral Resources, Inc conducted a telemarketing campaign for the Anti-Defamation League. The interim figures show that the gross receipts were $65,208.65 and the net to the not-for-profit was a negative $26,253.50. There were $195,172.25 in uncollected pledges leaving the percentage to the ADL a negative 40.26 percent. Also in the negative percentage column was the One Israel Fund, Ltd with a negative 456.79 percent.
Additionally, the report indicates that only 16.01 percent of monies collected for the Jewish National Fund go directly to the charity. Another telemarketing organization called InfoCision Management Corporation indicated in its closing report that their gross receipts were $58,294.10, with only $9,331.10 as net to the charity with no uncollected pledges.
The International Fellowship of Christians and Jews, Inc. only received 6.85 percent of monies collected, with gross receipts of $1.085,266.94, with only $74,342.30 going to the charity.
Telefund Incorporated was contracted to do a telemarketing campaign for the Bnai Brith and the report indicates that only 38.17 percent of monies collected reach the organization. Their closing statement reflects that there were $134,895.18 in gross receipts and $51,483.68 in net going to the charity. There were $51,379.82 in uncollected pledges.
Other charities such as the Cancer Survivors’ Fund only receive 10 percent of monies pledged by donors, as well as the Association for Firefighters and Paramedics, Inc. Among the organizations with negative percentages going directly to the charities included Food for the Poor, Inc, the Foundation for National Progress, Feed the Children, Inc, Bread for the World, Inc, the Arthritis Foundation, the Brooklyn Institute for Arts and Sciences, Amnesty International of the USA, the Center for Victims of Torture, the Children’s Defense Fund, Defenders of Wildlife, Inc, Friends of the Orphans, Fund for Animals, Inc, Memorial Sloan Kettering Cancer Center, the Humane Society Legislative Fund, the March of Dimes Foundation, Paralyzed Veterans of America, and the Lupus Foundation, among others.
Issuing tips for consumers as they consider making charitable contributions, Attorney General Schneiderman has advised potential donors to resist pressure to give on the spot, to research the charities they are considering making donations to, to give to only established charities, to ask how their donation will be used, to avoid unsolicited e-mail requests for donations, to use caution when donating via text and through social media outlets, to never give cash and to report suspicious organizations.
The attorney general’s office issued a statement saying consumers should only donate to “organizations that have a verifiable record of sucess meeting their charitable missions, whether it is establishing a college fund or providing health services. Closely examine charities with names similar, but not identical to, more established orginzations.”
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