Half of Charitable Donations Solicited by Commercial Fundraisers Goes to Overhead

Monday, December 03, 2012

Charities don’t always raise money directly. Sometimes they use professional charitable fundraisers who take a portion of the solicitations for fees or other overhead expenses.

Sometimes those fundraisers don’t take anything and sometimes they take a lot. The California Attorney General’s office reports that, on average, commercial fundraisers kept about half ($172.8 million) of the $338.5 million they pulled in last year.

The disparity between charities was marked. The Cleveland Clinic Foundation received 100% of the $590,208.40 raised by Harris Connect, LLC, while the Keck School of Medicine of USC had the opposite experience with the same company. Keck received $13,981, while Harris Connect got $325,633.05.

The Susan G. Komen Breast Cancer Foundation received 100% of the $1.27 million raised by New Balance Athletic Shoe, Inc., while the American Red Cross received $79,100 raised by West Business Solutions, LLC, which pocketed $270,197.

The attorney general’s report does not explain the disparity in experiences except to note that, “Negative amounts in the ‘To Charity’ column indicate the campaign raised less than the commercial fundraiser fee guaranteed in the contract between the charity and the fundraiser.” Charities are sometimes willing to pay fundraisers, including telemarketers, hefty fees to raise their profile and recruit donors and members who will contribute to the organization in the future.

The amount raised in 2011 was $24.4 million less than the year before, but the distribution to charities was still $11.7 million more than 2010 because the fundraisers took a smaller percentage. In 2011, charities received 51.05% of all the money raised, compared to 44.38% the year before.

The information was gleaned from 851 financial reports from fundraisers. Many charities don’t use commercial fundraisers, but if they do, they pay a flat fee for their services or percentage of the contributions collected.

–Ken Broder


To Learn More:

Report: Half of California Charity Donations Lost to Overhead (by Judy Lin, Associated Press)

Summary of Results of Charitable Solicitation by Commercial Fundraisers for Year Ending 2011 (California Office of the Attorney General) (pdf)

State Tracks Commercial Fundraising for Charities (by Marisa Lagos, San Francisco Chronicle)

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