The NY Attorney General has released an analysis of financial reports filed by professional fundraisers for telemarketing campaigns conducted in NY in 2010:
" Last year donors contributed a quarter of a billion dollars to charities through telemarketing campaigns conducted in New York. Yet what many donors may not realize is that only a fraction of the funds raised through telemarketing is typically kept by the charities."
In the Rochester and surrounding region, the AG reports that 37.62% of funds raised actually went to the charities. The rest went to pay the cost of fundraising, including fees to the telemarketer.
This percentage retained by the charities varied by region: NYC charities retained about 50% of funds raised, while Long Island charities retained only 20%, and the Lower Hudson Valley charities retained 17%.
Rochester region charities had mixed results:
A 2010 campaign by IDC Ltd for Rochester General Hospital raised $125k, but the hospital lost money, $100k, per the AG; however, if the $97k of pledges (not included above) are actually collected, the hospital will almost break even. According to the AG's office, IDC campaigns also lost money for the hospital in 2009 and 2008.
Kiwanis Club of Rochester raised $40k through Marketing Squad, Inc., but only received 25% of the proceeds.
Rochester Philharmonic used Bennett Direct Inc to raise $424k, and 71% of that actually went to the Orchestra.
The AG's report may be disturbing, but the numbers never tell the whole story. The AG reports uncollected pledges, but does not include them in the reported percentages. The report does not distinguish between fees to the telemarketer and other fundraising costs. The telemarketing campaigns may have created new donor relationships that could continue for years, and might have raised awareness of the charities, or generated other marketing benefits not immediately translated into donations. (OK, maybe I'm reaching, but there has to be a reason that a charity would continue to use a telemarketer despite these results.)
A pdf of the report on 2010 campaigns is available here.
Or, for more fun, the AG has set up a searchable database
Charities can use these resources to compare telemarketers, and potential donors can use these resources to screen charities before choosing to contribute through a telemarketing campaign.
As the AG says, " New Yorkers may easily search the report to see how much of their contributions in response to telemarketers’ solicitations is actually retained by the charity."
