Some Fundraisers Keep More Than 1/2 Of Charitable Donations: AG

New York State Attorney General Eric Schneiderman has released a new report that shines a light on professional fundraisers, illuminating how much some organizations keep after charitable campaigns.

This week, Schneiderman released his annual “Pennies for Charity: Where Your Money Goes; Fundraising by Professional Fundraisers” report, "which found that more than one-third of charitable donations ended up in the pockets of the professional fundraisers," according to a release.

The report examines trends in fundraising as well as the percentage of funds raised that went to charities. The report found that online methods are rising, while traditional methods like direct mail are gradually declining, the report said.

"New York has a robust charitable sector, supported by generous giving by New Yorkers. In 2016, more than $1.2 billion was raised in New York State through 987 fundraising campaigns conducted by professional fundraisers on behalf of charities that used a range of methods including special events, direct mail and telemarketing," the release said.

The report and the searchable Pennies for Charity database containing data can be found here.

"Of the more than $1.2 billion raised through campaigns conducted by professional fundraisers, charities netted over $822 million, or 67% of the proceeds, while professional fundraisers’ fees and expenses totaled $403 million, or 33%," the release said.

“New Yorkers, who always give generously to charity, should know how their charitable dollars are being spent,” Schneiderman said. “Today’s report shines a light on the high percentage of charitable dollars that too often get pocketed by outside fundraisers. Our charities bureau will continue to hold unscrupulous or fraudulent fundraisers accountable.”

"Pennies for Charity" aggregates information from fundraising reports filed with the Attorney General’s charities bureau for campaigns conducted by professional fundraisers on behalf of charities in the previous year, the release said.

Professional fundraisers must register with the Office of the Attorney General and provide financial reports that break down the revenue raised and the expenses generated by the campaign.

According to the data provided, Schneiderman said:

• In 374 campaigns, or approximately 37% of those covered in the report, fundraisers retained more than 50% of the funds raised, with 49% or less going to the charity.
• Charities retained $822 million overall of the funds solicited from the campaigns; fundraisers retained $403 million.
• In 131 campaigns, or 13%, fundraising expenses exceeded revenue by more than $9 million.

In an effort to stamp out suspect fundraising initiatives, during the past year, Schneiderman said the charities bureau's "Operation Bottomfeeder" shuttered the Breast Cancer Survivors Foundation, which Schneiderman said "spent only 3.5% percent of the millions it raised on helping cancer patients and those at risk of breast cancer. The charity’s nearly $350,000 in assets will be given to legitimate breast cancer organizations, he said.

Operation Bottomfeeder also shut down other charities using the same "predatory" business model, including the Association for Disabled Children and the National Children’s Leukemia Foundation," the release said.

The report also includes Tips for Donors, such as:

• Research the charity.
• Check out the charity's website.
• Consult the "Pennies for Charities database to see its fundraising costs and results.
• Search the charity’s name on the internet for reports of possible scams or law enforcement actions and check the charity’s rating on watchdog sites such as Charity Navigator.
• Consult the Attorney General’s Charities Bureau website to review an organization’s tax returns and its financial report.
• Never donate by cash or wire transfer, use checks or credit cards
• Donate via secure web addresses that begin with "https."
• Resist pressure to give on the spot.
• Ask how your donation will be used.
• Report suspicious organizations to the Attorney General's charities bureau at charities.bureau@ag.ny.gov or (212) 416-8401.

A copy of the report can be accessed here.

Patch file photo courtesy of New York Attorney General Eric Schneiderman