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Charities find gifts aren't a given

On average, for-profit fundraisers keep 54 cents of every $1 they collect. In some cases, nonprofits get nothing.

A TIMES INVESTIGATION

July 06, 2008|Charles Piller and Doug Smith, Times Staff Writers

The firm, Midwest Publishing Inc., consistently offered among the lowest returns by large fundraisers. It did not respond to written questions about its operations.

The fundraising business is growing. More than 300 fundraisers have registered in California. Since 2000, the number of campaigns and amounts raised by for-profit firms has risen by about two-thirds.


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Among the charities that netted little from such campaigns were the Humane Society of the United States, the American Breast Cancer Foundation, the Christian social-action group Concerned Women for America, the National Right to Life Committee and Students Against Destructive Decisions.

Among The Times' findings:

More than 100 charities raised $1 million or more from commercial appeals but netted less than 25 cents per dollar. Fundraisers got the rest.

In 430 campaigns, charities got nothing: All $44 million donated went to fundraisers. In 337 of those cases, charities actually lost money, paying fees to fundraisers that exceeded the amount raised.

In hundreds of other campaigns, charities apparently entered into contracts that limited their share of donations to 20% or less, no matter how successful the campaign.

Groups with strong emotional or patriotic appeal -- those supporting animals, children, veterans and public safety workers, for instance -- often fared worst. Missing-children charities received less than 15% of more than $28 million raised on their behalf.

Many nonprofits rely heavily on set-rate contracts and aim their campaigns toward a mass audience, which is less efficient than targeting a defined set of donors.

In general, charities argue that it takes money to make money and that the benefits of commercially run campaigns may not show in state filings.

For instance, Citizens Against Government Waste said that its telemarketing was meant to find donors who would give regularly, not necessarily to raise a large sum in a single campaign.

To critics, that argument often excuses wastefulness or profiteering -- and every charity pays for that.

Some charities "take advantage of American generosity," said Bennett Weiner, an executive with the Better Business Bureau research program Wise Giving Alliance. They "accomplish very little, siphon off good money from the community and tarnish the well for more legitimate nonprofits."

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