Collect Calls: Complaints about telefundraising
Edward Wilson works for a telefundraising company in the Midwest. He and his workmates make calls from a list representing donors all over the country who have given to other charities. But it's not a prospects list.
He has another name for it.
"The suckers list is people dumb enough
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And sucker would be the appropriate word. Most of the cash he brings in never reaches the cause for which it was donated, and most of his fellow fundraisers fail to let donors know charities typically get 15 cents on the dollar.
The American Institute for Cancer Research, according to the New York state attorney general's 2006 report on nonprofit fundraising, took in only 13 percent of the $1.1 million Infocision, a professional fundraising organization, raised. Only 12 percent of the $1.5 million Xentel raised for the National Cancer Coalition went to the group. And in 2006, Mothers Against Drunk Driving paid about $8 million to fundraisers and kept only $2.5 million, according to the New York attorney general's 2006 telefundraising records.
What's more, telefundraising organizations sometimes employ dishonest tactics to wring dollars from unsuspecting donors. Wilson said he worked in an office where at least one man calling on behalf of a law enforcement group identified himself as an off-duty police officer. "He was a retired maintenance guy," said Wilson, whose real name is withheld to protect his identity. "He was rather successful."
The fundraising script for the American Deputy Sheriff's Association instructed fundraisers to say they were raising money to pay death benefits for families of police officers and to buy bulletproof vests. The script also indicates that prospective donors should be told 100 percent of the funds would go to the charity.
A lawsuit filed by the federal government against Edison, N.J.-based Civic Development Group - which did telephone fundraising for American Deputy Sheriff's Association along with numerous police-related, cancer and other groups nationwide, including Long Island - charged CDG had begun to misrepresent itself as the charity, while keeping most of the funds for itself.
One excerpt from the fundraising script: "I work directly for [the group]. I am a [charity] employee calling you from the fundraising center. I do not work for a fundraising company."
The Federal Trade Commission in a complaint that prompted that suit charged "virtually no money raised by CDG benefited local law enforcement officers," despite callers' claims. The FTC said CDG fundraises by "making material misrepresentations to consumers."
Vermont Attorney General William Sorrell in 2001 said his office settled a "major charities fraud case" involving CDG, the Cancer Fund of America and Paralyzed Veterans of America-New England. The groups acknowledged CDG "told Vermont donors that Cancer Fund of America provided 'urgent pain medication' to critically ill cancer victims," when the only medications bought with contributions were over-the-counter products like ibuprofen.
The problem is there's usually no way to know or obligation to disclose exactly how funds will be used. There are no laws regarding how much nonprofit fundraisers can take from groups.
And despite lawsuits, dialing for nonprofit dollars continues on a massive scale.
"They have freedom of speech," said Gregg Carlson, chief executive of Henderson, Nev.-based telefundraiser IDC. "They're able to tell their story as long as they're not breaking any laws."
Watchdog organizations take a different view. "The charity, in most situations, is lazy," said Daniel Borochoff, president of the American Institute of Philanthropy. "They want easy money. They don't want to work for it."
And CDG, which didn't return repeated calls for comment, is effective at eliciting donations, according to John Schaffer, a former CDG fundraiser. "The charities choose Civic Development Group because they have so many offices and they do a hell of a job," Schaffer said.
George Ruotolo, chairman of Giving Institute, a fundraising research and advocacy organization, said some groups are happy to get money for nothing, even if it means most of the donations go to the fundraisers.
Chuck Hurley, chief executive of Mothers Against Drunk Driving, said these groups raise money MADD wouldn't otherwise have. "If you think it's easy to raise money for a nonprofit organization, even one as important as MADD, you're new to this."
MADD national tried more down-home methods of fundraising, but they failed. MADD national in 2005 lost money on golf tournaments, made a mere $585 after expenses on walking, running and biking events and earned only $326 on dinners and luncheons.
James Reynolds, head of Knoxville, Tenn.-based Cancer Fund of America, said some causes are happy to receive any amount of money, even if it's only 15 percent of total funds raised. "If you're in quicksand and someone throws you a rope, but it's not the kind of rope you like, you don't complain about it," he said. "You use the rope you get."
Credit: Claude Solnik
They call themselves champions for charity but today, the state attorney general filed suit against Marketing Squad Incorporated, located on Brooks Avenue and another telefundraiser in Rochester, Caring People Enterprises, accusing the two professional fund raising firms of fraud.
