Charities find gifts aren't a given

By donating to inefficient charities, said Daniel Borochoff, president of the American Institute of Philanthropy, "you are taking money out of the mouth of a hungry kid."

Urgent accounts

"Where are the children? Where did they go?" a child's mournful voice sings on the website of Operation Lookout -- National Center for Missing Youth. "Are they held captive or do they run free? . . . Oh, where can they be?"

The group's online, telemarketing and door-to-door outreach materials offer urgent accounts of runaways or kidnapping victims -- and equally urgent pleas for cash.

Commercial firms reported having raised more than $6 million for Operation Lookout, based in Everett, Wash., since 1999. Less than $1 million reached the charity.

A current contract between the fundraiser and the charity sets a minimum 15% return on donations. In practice, over the years, 15% has been the maximum. In each year from 2000 to 2006, it received exactly 15% -- not a penny more or less -- of funds collected in its name by commercial fundraiser Midwest Publishing.

Operation Lookout did not respond to requests for comment.

The charity has posted a defense of its fundraising on its website, blaming accounting requirements for distorting its results: "In some instances, accounting rules require that we combine volunteer recruitment, calls to action and public education making them appear as a 'fundraising' expense."

Neither of the nation's two major accounting standards bodies has ruled that such costs must be combined.

Based on tax returns and other sources, the American Institute of Philanthropy ferrets out hidden costs of fundraising by charities -- including but not limited to commercial campaigns. It estimated that Operation Lookout spent 84 cents to raise each dollar in its 2006 budget of $2.1 million, a worse record than all but 18 of more than 500 rated charities.

The philanthropy institute normally considers up to 35 cents to raise a dollar as a reasonable cost.

The Times analysis of commercial campaigns in California found inefficiency to be typical among missing-child groups: On average more than 85 cents per dollar went to the fundraiser.

However, some charities of this kind eschew commercial fundraisers, including the National Center for Missing and Exploited Children. Ernie Allen, its chief executive, said groups that rely on minuscule returns taint the entire field.