Charities "may be losing their most prized possession: their reputation for caring," said Paul C. Light, a professor of public service at New York University who wrote the survey and has studied nonprofit governance for more than two decades.
Many charities hire for-profit fundraisers precisely because they need help selling themselves to a skeptical public. They can be "a godsend and a lifesaver," particularly for charities without staff fundraisers, said Diana Aviv, chief executive of Independent Sector, a trade group for nonprofits.
Limited information is available about such firms; most are privately held and many shun the media.
Those that specialize in nonprofits with long-standing patron networks tend to offer better returns. New York-based telemarketer DCM Inc. works exclusively for arts groups, including the Los Angeles Philharmonic, targeting ticket buyers and former donors. It enjoys one of the best records in the business, returning, on average, 72 cents per dollar raised.
"I don't think that telemarketing is a great contribution to Western civilization, but art is," said Phil Miller, DCM's president. "We provide a good service for great organizations."
Even so, many charities get stuck with unfavorable terms.
A contract between Michigan-based TeleService USA and the veterans charity VietNow makes donor lists "the exclusive property" of the fundraiser. If the charity switches fundraisers, it would lose access to past supporters -- the most likely future donors.
TeleService USA, which delivered to its clients, on average, 11 cents per dollar raised, did not respond to requests for an interview.
Hundreds of charities follow the practice used by Operation Lookout, many accepting set-rate contracts that deliver a sliver of gross donations. For small charities, the contracts seem to minimize risk: Fundraisers pay upfront costs, and charities get guaranteed -- if often small -- returns.
But major charities are the dominant users of for-profit fundraising, whether to raise money for basic costs or to expand a donor base. Among 1,614 charities with commercial campaigns registered in California, 100 accounted for 73% of gross donations. Just two, Paralyzed Veterans of America and the American Diabetes Assn., together took almost 14%.
In theory, large charities use for-profit firms more efficiently because they can tap long-standing donor networks. In practice, they do little better than small ones.
