SACRAMENTO — For-profit fund-raising companies raised almost $200 million for charities in 1998, yet turned over less than half the money to the nonprofit organizations that hired them, according to a report released Monday by state Atty. Gen. Bill Lockyer.
Charities that use commercial firms for at least some of their fund-raising include the Sierra Club, the American Cancer Society and Amnesty International. Many others are less known but have names that suggest they do good deeds for such popular causes as law enforcement officers, military veterans and sick children.
"While not true for all commercial fund-raisers," Lockyer said, "most of the money raised by these enterprises went to solicitation expenses and fund-raiser profits, rather than the charity that hired them."
Altogether, charities that hired commercial fund-raising firms in 1998 received $85.8 million, or 43.8%, of the $196 million raised on their behalf. The firms received $110.2 million, or 56.2%. The percentage that went to charities is about the same as they received from such efforts in 1997.
Most of the companies raise money through phone solicitations. Some also send direct mail appeals for money.
At least 130 profit-making fund-raising companies reported turning over 15% or less of the money they raised to charities that hired them. And 157 commercial fund-raising campaigns gave 50% or more of the money they raised to the charities.
In releasing the annual report on commercial fund-raisers, Lockyer urged that when telephone solicitors call, potential donors should "ask the questions: 'Is it a commercial fund-raiser? What percent goes to the charity?' "
The attorney general has about 10 open investigations into commercial fund-raisers, said Deputy Atty. Gen. Peter Shack, who investigates cases involving charities. He said that about five civil complaints are pending in courts across the state.
The $196 million represents a fraction of the billions donated by Californians to nonprofit organizations. Most of the 80,000 charities registered in California do not use commercial fund-raisers.
At least seven of 130 commercial fund-raising appeals that netted charities 15% or less of their proceeds raised upward of $1 million.
Some representatives of charities and commercial fund-raisers contacted Monday disputed the numbers in Lockyer's report. Others explained them by citing the high cost of finding donors.
