A headline on the front page of Monday’s Tribune certainly got my attention: “Donations don’t always reach charities.” When something bad happens to one nonprofit, it seems to taint all nonprofits. And this is why the headline grabbed me.
The California Watch article has competing themes. On the one hand, some nonprofits are willing to take an upfront loss on fundraising because the long-term gains are significant. The cost of the first donation is much greater than the cost of a second or third donation. How then can an organization get that first donation without spending money?
On the other hand, the idea that nonprofits should be investing money in this way is somehow bad. Businesses invest regularly in activities that will eventually pay off. Why not nonprofits?
But the hook of the article was professional or commercial fundraisers. During my career, I’ve served as a fundraising consultant and have hired them. The vast majority of these people are honorable and honest. They provide a much needed service to their clients. And most of the time the client is stronger after the contract is over.
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Keep in mind, the article pointed to 13 nonprofits in California. There are more than 107,000 nonprofits registered in the state. No one knows exactly how big this problem is. More information about commercial fundraisers is available on the State Attorney General’s website, http://www.ag.ca.gov/charities.
Nonprofits raise money in order to provide programs and services. For me, the real issue is the fraud that a few commercial fundraisers perpetrate. I had heard about these groups and stumbled upon one. What I learned from talking with the owners was disturbing. It changed the way I respond when someone calls me for a donation. But in the eyes of the law, what they do is a private contract with the nonprofit.
A small number of these companies will guarantee a certain amount of money to a charity, typically more money than the charity normally gets. For this example, let’s say $50,000. In exchange, the charity allows the fundraising firm to use its name to raise money. The firm’s staff then opens the telephone book and starts calling. Let’s say the campaign raises $150,000. The firm gives $50,000 to the charity, pays expenses (including pay and bonuses), and takes the remaining amount as profit.
So now when I get a call on behalf of an organization I’ve never heard of, I do the following:
Ask the solicitor for his/her relationship to the nonprofit. They must disclose it.
Ask how much it is costing to raise $1. They must disclose it.
Ask how much has been guaranteed to the charity. By this time they hang up on me.
If they haven’t hung up and I’m interested in the cause, I ask for material to be sent to me. If it arrives, I can then look into the organization and perhaps support it directly rather than through the fundraising firm.
I’ve also gotten bolder about saying no and ending the call. Especially if it’s at dinner time.
Here are a few rules to use when you get a telephone call from a nonprofit:
Never give out your credit or debit card number to someone you don’t know in support of a charity you’ve never heard of. This holds for solicitations over the phone, by email and in person. Sometimes the name of the group is close enough to a cause you support but is a different organization entirely.
Ask for materials to be sent to you in the mail. Be wary if the materials can only be sent via email, they may have a virus attached.
Look up the nonprofit on www.guidestar.org . Basic information about all nonprofits is available for free; you must register but GuideStar protects your information.
Call the nonprofit. The staff or volunteers will gladly answer your questions.
Most importantly, don’t let your emotions overwhelm your thoughts. Make your gifting decisions when you can think clearly about how much you can afford and how you want to invest in your community. Your donations are needed.
Barry VanderKelen is executive director of the San Luis Obispo County Community Foundation. Contact him at email@example.com.