Charities net only 36% from marketers
WNY’s percentage similar to state’s
Professional fundraising companies in 2007 kept nearly two-thirds of the money they raised on behalf of nonprofit organizations in Western New York, according to the latest state attorney general’s report on telemarketing campaigns for charities.
The for-profit companies brought in a total of $2.3 million in the name of 25 charities in Erie, Niagara, Allegany, Cattaraugus, Chautauqua, Genesee, Orleans and Wyoming counties.
The charities received only $831,657 — about 36 percent. The rest was the cost of doing business with the professional fundraisers, according to the annual report, “Pennies for Charities.”
Statewide, telemarketers raised $178.7 million in the name of 442 charities and handed over about 39 cents on the dollar to charities.
The report categorized the state in eight regions, including Western New York, which was third-worst in its rate of return for telemarketing campaign proceeds.
The region also had the fewest organizations hiring telemarketers.
All but three of the 25 organizations in Western New York are police and fire benevolent groups. Such groups often do charitable work, but unlike 501(c)3 nonprofit agencies, they are not bound by law to spend their money solely on charitable purposes.
American Legion Convention Corp. of New York saw the worst return on contributions. Marketing Squad of Rochester raised $463,200, but the Legion group ended up getting $69,480 — 15 percent of the donations.
The North Tonawanda Professional Firefighters Benevolent Association also fared poorly with two fundraising efforts by Stage Door Music Productions. The first effort resulted in $6,218 for the association — 20 percent of the $31,090 that was raised. In a second campaign, Stage Door brought in $40,974 and gave $8,295 of that to the firefighters group.
Telemarketers argue that despite how the state report looks, they rarely end up making huge profits, and sometimes lose money, because of the costs associated with their work.
Some charitable groups also say the only way they can survive is to hire professional fundraisers.
Nonetheless, Attorney General Andrew M. Cuomo cautioned donors about how they give and urged charities to find more effective methods of raising money.
“Especially in today’s economy, when New Yorkers give their hard-earned money to charity, they expect the donation to make a difference and to help those in need,” Cuomo said.
The attorney general’s office first began releasing the reports in 1995.
Other findings statewide:
• In nearly 80 percent, or 436 of the 553 campaigns, charities kept less than 50 percent of funds raised, and in nearly half, charities received less than 30 percent.
• In 51 of the 553 campaigns, charities lost money.
• In 45 of the 553 campaigns, charities retained at least 65 percent of the money raised, an amount deemed acceptable under the Better Business Bureau’s standards for charitable organizations.
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