THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Charities using fund-raisers get 43% of take

Attorney general urges donors to ask for details first

By Erin Ailworth
Globe Staff / December 16, 2010

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

Professional fund-raisers collected more than $300 million in charitable donations in Massachusetts last year, but less than half that money ended up going to charities, according to an annual review by Attorney General Martha Coakley’s office.

Most of the money paid fund-raisers’ expenses and fees, according to the report, released yesterday.

Charitable organizations received $141.2 million — or 43 cents out of every dollar — of the $329 million collected on their behalf in 2009. Charities received a slightly smaller cut in 2008, or 41 cents on the dollar.

“People who are called should feel free to say no thanks, or if they are interested, to ask questions,’’ Coakley said. “They should ask, ‘What percentage of dollars you solicit actually goes to the charity?’ ’’

Each year, Coakley’s office reviews charitable campaigns run by professional fund-raisers in Massachusetts as a way to protect consumers and educate them about where their money goes. Following a suit filed by the attorney general, three professional fund-raisers must together pay more that $125,000 in civil penalties under accords outlined this week. They were accused of misleading Massachusetts residents into believing they were donating money to support state police.

Instead, funds were being raised on behalf of the Disabled Police Officers Counseling Center Inc. in Niceville, Fla., the attorney general’s office said.

In 2009, nearly 400 charities hired fund-raisers to conduct more than 660 such campaigns, compared to roughly 630 campaigns run for nearly 390 charities a year earlier. Many smaller organizations hire professional fund-raisers because it’s an effective way to bring in revenue. But they pay a price: an average of about 60 percent of the money collected in their name, according to the report.

Michael Nilsen, a spokesman for the Virginia-based Association of Fundraising Professionals, said collecting money through a professional fund-raiser or telemarketer can be expensive, as firms must pay administrative costs, including workers’ salaries. But when a firm keeps a high percentage of donations that “absolutely raises flags.’’

“It’s OK to take your time in giving,’’ he said. “Fund-raising costs should be an element of your decision, and if they are too high that should be a good reason to stop the conversation.’’

Fund-raising expenses, of course, vary widely. Helping Hands of America Foundation Inc., of Wrentham, for example, collected nearly $3.5 million through vehicle and boat donations in the name of four charities, but returned only 5 percent, or about $175,000, to those groups. That’s mainly because of the high costs of transporting, storing, repairing, and selling those vehicles and boats, said Robert Sacchetti, president of Helping Hands.

“It is a very capital-intense process before donations are turned into revenue,’’ he said, “but it is revenue that our charity partners are very happy with.’’

On the other hand, eight charities, including the American Red Cross and the March of Dimes, got back over 90 percent of the nearly $205,000 raised for them by Coinstar Inc., which operates kiosks where consumers can convert coins into dollar bills.

Erin Ailworth can be reached at eailworth@globe.com.

Related

Graphic Give and take