Telemarketers keep majority of charity funds

/ Source: The Associated Press

A bigger piece of charitable donations made by North Carolinians is going to telemarketing companies than to the organizations they represent, according to an annual report by the secretary of state’s office.

Paid solicitors who report to the state said they raised $194 million for charities from state residents between July 2005 and June 2006, according to a report released Wednesday. The charities involved received an average of 48 cents for every dollar donated. The year before, charities received an average of 55 cents.

Secretary of State Elaine Marshall called the higher cut “uncomfortable” and said donors should quiz anyone who calls to ask for money.

“Every citizen ought to ask, ’Are you a telemarketer, and what percentage goes to charity?”’ Marshall said. “If they start tap dancing, if they start back pedaling on the conversation, that ought to raise red flags.”

The increase referred to donations made through professional solicitors, not those made directly to an organization or to groups that use their own staff or volunteers to solicit funds. Also, not all charitable groups must report donations to the secretary of state including hospitals, universities, churches and some major organizations such as the American Red Cross.

The amount charities received varied widely depending on the group and the solicitor. Some charities received none of the donations and others received the entire amount, the report said.

America’s Athletes with Disabilities raised more than $1 million in North Carolina using a telemarketer called Contract Communications. Of that, the charity received about $180,000, according to reports filed in July 2005 and June 2006.

Charity president David Williamson said his Maryland-based organization doesn’t want to use telemarketers but needs them.

“The problem with small charities like ours, if you’re not well-known it provides some revenue that is somewhat consistent until you can develop other sources,” he said.

Charities negotiate rates with telemarketing companies based on the length of their relationship and how much money the companies raise. If the telemarketer doesn’t raise as much as expected, it tries to get a bigger cut of the contributions in the next contract, Williamson said.

The report found that donations as a whole through paid solicitors were down over the period involved.

Marshall noted that the report included donations made in late summer 2005, when hurricanes Katrina and Rita struck. Many of the major charitable organizations that took part in hurricane relief were exempt from the state reporting law, she said.