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California shines spotlight on commercial fundraisers

California shines spotlight on commercial fundraisers

Consumers should be aware if fundraiser is an unpaid volunteer or a business

December 4th, 2012 by Mark Huffman of ConsumerAffairs in News

This is the season for shopping, feasting and partying. It's also the season of "good will toward men," when many people make generous contributions to charity.

But California Attorney General Kamala Harris wants consumers to be aware that not all charity fundraisers who call you are quite as generous as you are. For many, it's a business -- and a lucrative one at that.

Harris has released a report showing commercial fundraisers in California raised $338.5 million in 2011, just over half of which was actually received by charitable organizations.

51 percent goes to charity

The 51 percent of donated funds going to charities using a professional fundraiser represents an increase from the 2010 average of 44.4 percent. The data are included in the California Department of Justice's Annual Report of the results of commercial fundraising campaigns for charities, produced by the Charitable Trusts Section.

"This report gives Californians the vital information they need to make educated choices about where to make charitable contributions this holiday season," Harris said. "While commercial fundraisers play a role in supporting charities in California, it is important for donors to know how much of their money will be used to support the charity's programs, and how much will go to overhead."

Commercial fundraisers who are hired by charities to raise money on their behalf typically charge a flat fee for their services or take a percentage of the contributions they collect. It is interesting to note that most charities registered with California do not use commercial fundraisers, but do their own, in-house fundraising. For consumers approached for a donation, that might be one of the first questions to ask.

Other questions to ask

Harris' office also publishes the Guide to Charitable Giving for Donors that provides advice, guidelines and information to help donors make informed decisions about giving. The guide suggests that donors:

Ask the fundraiser how a donation will be distributed. Fundraisers are required by law to tell a consumer this information.

Ask what percentage of donations will be used to pay for fundraising expenses. This information can better inform the consumer as to how much of the contribution will go to the cause versus overhead.

Ask if the fundraiser works for a commercial fundraiser and is being paid to solicit. If the answer is yes, then it is likely less of the funds are going to the charity.

Avoid cash donations, as cash can more easily be diverted to non-charitable purposes and there is no way to trace it.

Avoid giving credit card information to a telephone solicitor or in response to a telephone solicitation.

Learn about a charitable organization, its activities and its fundraising practices before giving.