Giving Tuesday surely helps charities, but data from top law enforcement officials in New York and Massachusetts indicate donations can also be windfalls for professional fundraisers.
Professional fundraisers in New York kept almost one-third of the $1.1 billion given last year to nonprofits during 964 fundraising campaigns that used professionals to raise money, according to the New York State Attorney General’s office. The 31% retention rate on these types of fundraising campaigns is down from a 34.5% in 2015.
Meanwhile, the Massachusetts Attorney General’s office said paid fundraisers kept an even larger slice of the pie. For 700 fundraising campaigns last year, 59% of the $281 million raised stayed with professional solicitors. That’s up from the 53% average retained by paid solicitors in campaigns reported to Massachusetts authorities in 2016.
Some charities hire for-profit fundraisers to help them bring in money, the attorneys general explained. “Fundraisers can play an important role in furthering a charity’s mission, and many belong to professional associations that require them to commit to a code of ethics,” said the report from New York State Attorney General Barbara Underwood’s Charities Bureau.
The report added that while many professional fundraisers, often working via phone, help charities “fulfill their missions, some fundraisers engage in dubious behavior that has a negative effect on charitable giving.” That could be things like charging high fees, or presenting misleading information to donors, it said.
The money in these types of fundraisers represents just one portion of charitable giving overall. For example, New Yorkers contributed a total of $33.5 billion to charities in 2015, which is the most recent data from to the New York State Department of Taxation and Finance.
There’s nothing illegal in using professional fundraisers, but donors need to proceed with caution when giving, authorities said. For example, the New York and Massachusetts attorneys general noted registered charities will appear on sites like Charitynavigator.org. Both offices also have charity databases on their websites as well.
Anyone who calls to request a donation is obligated to disclose that they are being paid to make the ask, according to the attorneys general. Potential donors should also quiz their callers on how much money will go directly to the charity, they urged. With online fundraising appeals, be sure the website is secure, and includes things like “https://” in the web address (the “s” means the site is more secure than ones with a plain “http” in the URL).
The reminders about donation requests — especially those via phone — come as
fundraising, apps and online platforms have become popular ways to pledge money in recent years. Online giving has soared since the start of Giving Tuesday in 2012. Blackbaud, a cloud software company serving nonprofits and other companies and organizations, said online giving has grown 500% since 2012.
Massachusetts Attorney General Maura Healey said, “There are many reputable and worthy charities to support, but people should make sure to do research, make informed decisions, and understand how much of a donation will actually go to the charity before they give.”
“Too often, a large percentage of charitable dollars are pocketed by outside fundraisers rather than going to the cause itself,“ Underwood said.
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Andrew Keshner is a personal finance reporter based in New York.
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