AG Schneiderman Issues Report on Charity Telemarketers: Bulk of Donations Go Into Pockets of Fundraisers, Not Those in Need

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"Pennies for Charity" Report Finds That For-Profit Fundraisers Kept An Average of 62 Cents of Every Charitable Dollar.

New York, NY - February 27, 2014 - Attorney General Eric T. Schneiderman today released his annual “Pennies for Charity” fundraising report showing that for-profit telemarketers operating in New York in 2012 retained the lion's share of donations they raised on behalf of charities – more than $154 million that was intended to help those in need. 
 
Telemarketers registered in New York reported raising more than $249 million in contributions in 2012, the most ever in the history of "Pennies for Charity." The 2013 "Pennies for Charity, Where Your Money Goes: Telemarketing by Professional Fundraisers" report found that telemarketers kept an average of 62 cents of every charitable dollar they raised as their fees and expenses, with just 38% of the funds actually going to charitable organizations. In half of the fundraising campaigns run by telemarketers, the charities retained less than 30% of the funds raised. In 91 campaigns, telemarketers were actually paid more than the amount that the individual charities received. A portion of the donations covered by this report were made to charities related to Hurricane Sandy relief and aid to the victims of the Sandy Hook shooting.
 
“New Yorkers who open their hearts and wallets deserve to know how their hard-earned dollars are being spent and how much of their money is going to pay telemarketers’ salaries and costs,” Attorney General Schneiderman said. “Our annual report aims to help New Yorkers maximize the benefits of their donations by showing how much really goes to charity, versus how much remains in the pockets of fundraisers.”
 
Last year, following the release of the 2012 "Pennies for Charity" report, the Attorney General served subpoenas and launched several investigations focusing on fundraising campaigns that repeatedly result in little or no money going to charities. So far, the office has shut down three charities and one fundraiser. Additional investigations are expected to result from this year’s report.
 
The "Pennies for Charity" report aggregates information from fundraising reports filed with the Attorney General’s Charities Bureau for telemarketing campaigns conducted in the previous year.  
 
Other significant findings from analyzing the 589 fundraising campaigns covered in the Attorney General’s report include:
 
In 459 of the 589 campaigns (78%), the charities retained less than 50 percent of the funds raised.
 
Statewide, the rate of return was lowest for donations solicited in Nassau and Suffolk counties.
 
In an effort to help people ensure that their donations help those most in need, Attorney General Schneiderman issued the following tips when making donations via phone solicitation:
 
Resist Pressure To Give On The Spot. If you receive a call from a telemarketer, do not feel pressured to give over the phone. You can ask to receive information about the cause and a solicitation by mail.
 
Ask The Telemarketer. Ask the caller what programs are conducted by the charity, how much of your donation will be used for charitable programs, how much the telemarketer is being paid and how much of your donation the charity is guaranteed.
 
Ask How Your Donation Will Be Used. Ask specifically how the charity plans to use your donation, including the services and organizations your donation will support. Avoid charities that make emotional appeals and are vague in answering your questions. Be wary if an organization will not provide written information about its charitable programs and finances upon request. Any legitimate organization will be glad to send you this information.
 
Look Up Charities. Review information about the charity before you give. The Attorney General’s interactive website allows potential donors to easily search the "Pennies for Charity" report by the name of the charity or by region in New York State. (A link to the search tool can be found on the Attorney General’s charities website at www.charitiesnys.com). Users can also see how much money was raised by a professional fundraiser and how much money actually went to each charitable organization. Also confirm that the charity is eligible to receive tax-deductible donations by searching the IRS website at www.irs.gov.
 
Give To Established Charities. Donate to organizations you are familiar with or ones with a verifiable record of success in meeting their charitable missions. Closely examine charities with names similar to more established organizations.
 
Never Give Cash. It's best to give your contribution by check made payable directly to the charity. This is safer than giving by credit or debit card and far safer than sending cash. Be careful about disclosing personal or financial information; never give out such information to an organization or individual you don't know.
 
Report Suspicious Organizations. If you believe an organization is misrepresenting its work, or that a scam is taking place, please contact the Attorney General’s Charities Bureau at charities.bureau@ag.ny.gov or (212) 416 8401.
 
"Pennies for Charity" was compiled by the staff of the Attorney General’s Charities Bureau, including Operations Manager Joshua Carr, Assistant Attorney General Karin Kunstler Goldman and Fundraising Registration Section Supervisor Kathleen Yuhas, with the assistance of Kevin Ryan and Craig Williams of the Legal Technology Bureau. 
 
The resulting investigations are being handled by Charities Bureau Assistant Attorney General Yael Fuchs and Policy Analyst Liam Arbetman.
 
A copy of today’s report can be accessed here.
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