In 2013, California Professional Fundraisers Kept 45% of Donations Raised for Charities

I have always found it troubling when people donate to charity but the donees receive a very small share of the donation.  And yesterday’s Orange County Register published a story about such a practice, a story that made me see, well, not orange, but red.  According to the Register, in 2013, the for profit firms that raise money for charities collected $361.3 million from well-meaning Californians and pocketed $161.2 million, or 45.4 percent, of the take, this according to the latest figures from the Office of the Attorney General.  Incidentally, those figures were better than those for 2012, when the for-profit firms pocketed 63 percent of the money raised in nonprofits’ names.

California Attorney General Kamala Harris has bemoaned “the alarming extent to which charitable donations are often diverted to for-profit companies.”  However, Assemblywoman Jaqui Irwin, D-Thousand Oaks, noted that at least the trend seems to be going in the right direction (i.e., from 63 percent last year to 45.4 percent this year).  Meanwhile, here’s an interesting statistic: “generally speaking, charities with the words ‘police’ or ‘firefighter’ in their names kept less than one-third of what was raised on their behalf, with the overwhelming majority going to the for-profit fundraiser,” reports the Register.

The Register continues:

In their defense, officials said some campaigns costing millions were strategic investments that will pay off far more than they cost, in future contributions.

Others, however, are run-of-the-mill, we-need-your-money-now-please affairs, where for-profit firms kept huge chunks of what donors believed would fund good works.

Charities often argue that it’s not really money out of their pockets, since professional fundraisers take a percentage of proceeds, or a pre-determined amount if a minimum is not met, said Sandra Miniutti, vice president of Charity Navigator, a nonprofit watchdog.

“However, from a donor’s perspective, that argument does not hold, since it is actually the donor’s money that is going to a professional fundraiser as opposed to the charity they thought they were supporting,” Miniutti said by email. “In large part, it is still professional companies taking advantage of the lack of education on the giving public’s part.”

And that’s why the Attorney General’s Office started gathering these numbers to begin with.

Well, I hope the Attorney General’s Office can use these numbers to do something to change this sad situation.

VEJ