State Charity Reports: How Much Donor Money is Wasted in Your State?
by Andrew Heck, Charity Navigator
March 1, 2006
Among the over 5,000 charities rated by Charity Navigator there are many who spend your money wisely to carry-out their valuable missions of addressing the needs of the poor, supporting the arts, educating children, and protecting animals and the environment. Unfortunately, there are a few who operate inefficiently and irresponsibly and absorb donations that could otherwise go to benefit their more effective peers. A common thread among charities receiving low Charity Navigator ratings is these charities' reliance on professional, for-profit fundraisers that can keep anywhere from 20 to 90 cents of each dollar you give them.
Fortunately, many state attorneys general are also aware of the astoundingly high amounts of money commercial fundraisers keep for themselves and are keeping track of how much professional solicitors are raising in their states and what percentage of your donation actually reaches the charity to which it is intended. Compiled below are the results from ten states whose attorneys general are watching out on behalf of the charitable donors within their borders.
STATES WITH AGGREGATE DATA
The seven states below publish annual reports detailing the total amounts collected by commercial fundraisers on behalf of charity and how much of the money collected actually reached the intended recipients. Of the seven states reporting aggregate data, none reported charities receiving more than 55% of the donations raised on their behalf, and five showed average returns to charity below 50%. Results of the attorney general reports are shown below:
California
"In 2004, commercial fundraisers collected a total of about $293.7 million in charitable contributions within this state. The return to charity from the average commercial fundraiser campaign was 36.48%. These figures represent an increase in charitable contributions from 2003 of approximately $60.6 million (26%), with a decrease in the average percent to charity of approximately 4.54 percent."
For more information read: Attorney General's Guide for Charities (2005) located at http://ag.ca.gov/charities/publications.htm
Colorado
"Paid solicitors conducting charitable solicitation campaigns in Colorado collected over $164 million in donations on behalf of their clients in 2005, which was $68 million more than in 2004. Of this total, $78 million reached the charitable organizations after expenses for the campaigns were deducted, which represents 47.5% of the total donations, down from 55.0% in 2004."
For more information read: Annual Report on Charitable Solicitations located at http://www.sos.state.co.us/pubs/bingo_raffles/annual_reports.htm
Massachusetts
Paid solicitors in Massachusetts raised approximately $201.9 million on behalf of charities in 2003, of which charities only received $96.7 million, or 47.89%.
For more information read: Attorney General's Report on Telemarketing for Charity located at http://www.ago.state.ma.us/sp.cfm?pageid=1216
New York
"Charities retained $63.5 million, or 37.24%, of the funds raised by telemarketers registered to solicit contributions in New York in 2004. While some of the charities received more, many received much less than 37.24%, and some received nothing at all. The remainder - $107.1 million - was paid to the fundraisers for fees and/or used to cover the costs of conducting the campaigns."
For more information read: Pennies for Charity located at http://www.oag.state.ny.us/charities/charities.html
North Carolina
From July 1, 2004 through June 30, 2005 commercial fundraisers raised approximately $205 million for charities. Of this $205 million, however, the charities themselves only received about $113 million or about 55%.
For more information read: Annual Charitable Solicitation Licensing Report located at http://www.secretary.state.nc.us/csl/#
Tennessee
Of the $154 million raised for charities by professional solicitors in Tennessee in 2004, the for-profit solicitors managed to keep 53% while charities only received approximately 47% of the total.
For more information read: 2004 Annual Report on Charitable Solicitations located at http://www.state.tn.us/sos/charity/annualreport/index.htm
Washington
In Washington charities kept, on average, just over 50% (about $222 million) of the $444 million raised by commercial fundraisers during the time period covered by the report.
For more information read: Commercial Fundraiser Activity Report- Overview located at http://www.secstate.wa.gov/charities/
OTHER STATES
The three states below do not have data available showing the total amount collected by professional fundraisers, but they do publish useful information about charitable solicitation within their state.
South Carolina
South Carolina Secretary of State Mark Hammond releases an annual list of "Scrooges and Angels" in order to show "those charities that represent some of the best and worst of charitable giving". Charities on the "Scrooges" list that are rated by Charity Navigator include:
Arthritis Research Institute of America
Muscular Dystrophy Family Foundation
National Veterans Services Fund, Inc.
Operation Lookout
Wishing Well Foundation USA
For the full list visit: http://www.scsos.com/angels_and_scrooges.asp
Georgia
Georgia maintains a list of "Uncharitable Charities" which includes charities such as The Committee for Missing Children that use professional solicitors and get poor returns on their campaigns.
For more information visit: http://www.sos.state.ga.us/securities/uncharitable_charities_2003/
Hawaii
The State of Hawaii Department of the Attorney General publishes "Charitable Solicitation Financial Reports" organized both by the name of the charity and of the solicitor. From this report you can see that, for example, Reese Teleservices, Inc. raised $15,694 on behalf of Kids Wish Network in Hawaii but the charity only received $1,883, a return of only 11.9%.
For more information visit: http://www.hawaii.gov/ag/charity_resources.htm
