AG reports says some fundraisers yield little to charities

Massachusetts Attorney General Martha Coakley released a timely report on charitable giving this week that offers encouragement, advice and warnings about donating to nonprofit organizations. The report finds that many professional solicitors, including some that raise money for Island charities, return a relatively small percentage of the money they solicit to the charities that hire them. In many cases, most of the money raised goes to pay for salaries, promotional campaigns, telephone charges, and office overhead for the soliciting organizations.

“It is important to support the Massachusetts charities that benefit residents of the Commonwealth who are in need, especially during the holiday season,” Ms. Coakley said in a news release. “We encourage consumers to ask questions and do basic research in order to know exactly where their money is going and how it is going to be used to ensure that every dollar is spent appropriately.”

By the numbers

According to the report, professional solicitors raised nearly $389 million for Massachusetts charities in 2011. On average, the charities got less than half of the money raised, about 49 cents for every dollar donated. That is slightly higher than documented in the same report last year, and significantly higher than the 2007 report, when Massachusetts charities got about 36 percent of the money solicited.

The report covers only those professional solicitors who comply with the state law that requires them to register with the attorney general’s office, pay a bond, and file reports on each charity campaign they conduct. The U.S. Supreme Court has ruled that states have no authority to require a minimum percentage of proceeds go to the charity.

“Donors who care about what portion of their donation will go to the charity should ask about this before making a donation,” wrote the authors of the report.

Local reports

The report includes an appendix which summarizes the performance of registered professional fundraisers. Among them is All Pro Productions, Inc, whose clients include the Dukes County Sheriff’s Association, an organization of sheriff’s department employees. In 2011, All Pro Productions solicited $107,420, according to the report, and passed on $39,745, or 37 cents for every dollar donated.

All Pro Productions also raises money on Martha’s Vineyard through a telemarketing campaign for the Paralyzed Veterans of America, New England Chapter. In 2011, the professional fundraiser took in $795,155, and returned 17 percent of that amount to the charity. The business raised money for 21 other charities and returned an average of 27 percent to the charities.

The Trustees of the Reservations, a conservation organization which owns and manages property on Martha’s Vineyard including Long Point, and Norton Point beaches, hired Public Interest Communications, Inc. to raise funds. Public Interest Communications solicited $43,794, and returned 40 percent to the nonprofit Trustees of the Reservations.

Some fundraisers return less. According to the report, Midwest Publishing-DN, Inc. raised $8.7 million for charities including the New England Association of Chiefs of Police, the Committee for Missing Children, and the National Vietnam Veterans Foundation, Inc. Midwest Publishing returned an average of 12 percent of the money raised to the eight charities that hired the company.

Some fundraisers do much better. For example Fine Line Communications raised money in Massachusetts for the Humane Society of the United States and the Nature Conservancy. Fine Line Communications returned 80 percent of the solicitations to those two charities, according to the report.

Digging deeper

In an effort to learn more about the reasons charities hire outside solicitors, the attorney general’s office conducted phone interviews this year with several organizations. “Those conversations revealed that even where the net proceeds going to a charity were low, the charity explained they had expected this result and had decided to invest in professional fundraising services to obtain long term benefits other than immediate donations,” the report’s authors wrote.

Other charities said they didn’t have the time or resources to raise funds themselves. “Although the broader perspective may explain some of the results,” the authors wrote, “the unfortunate truth remains that some charitable solicitation activity in the Commonwealth benefits principally the owners and staff of for-profit professional solicitors. It also remains true that certain solicitor’s deceptive practices can make it difficult for donors to tell whether their contributions are benefitting the charities they want to support.”

Word to the wise

In an advisory called “Give Wisely,” the attorney general suggests that to maximize the value of donations, it is generally better to avoid donating money to telemarketers who call you at home. “You should select the charities you would like to donate to, do not allow them to select you.”

State law requires that fundraisers tell potential donors the percentage of money that goes to the charity, if you ask. It is also against the law to mislead donors or misrepresent facts.

The attorney general’s office asks anyone who wishes to report questionable fundraising practices to call them at 617-963-2315, or email them at charities@state.ma.us.