Just hang up on charity phone solicitations

November 07, 2010|By Jay Hancock

The junk phone calls aren't over. Charity fundraisers — mining holiday benevolence and tax deadlines — have seized the auto-dialers from the politicians.

Your reaction, however, ought to be the same. Ignore them. Yes, even if it's your favorite nonprofit and you always give money, just say no. Politely decline and hang up.

Then, if you want to support the organization, write a check and send it to the charity's address, found on their website. Or donate online by credit card.

The person asking for money on the phone is likely from a for-profit company that will keep half or more of your gift — without telling you — and leave little for the group you want to help.

A recent call on behalf of the Alzheimer's Association reminded me of this. Last year, I gave the association money in honor of a friend's mother. Now a representative is calling back, asking me to solicit friends and neighbors for donations.

"How much of this money will the nonprofit receive?" I ask.

"Seventy-two percent of the donations goes to services and people," she says.

That seems unlikely, further research shows. And the woman is not with the Alzheimer's Association, either. Upon questioning, she says she's with InfoCision, a for-profit fundraising and telemarketing company based in Akron, Ohio.

InfoCision, it turns out, raised $3.9 million in the Alzheimer's Association's name last year, according to the association's filings with the Internal Revenue Service.

But InfoCision kept $1.9 million of the proceeds, the documents show. The nonprofit group that finances research into Alzheimer's, the group that promotes awareness of the devastating disease, the group that donors thought they were supporting — that group? It got only $2 million, or 51 percent of the funds.

The way a lot of these deals go, however, 51 percent is generous.

A large majority of New York charities received less than half the money raised on their behalf by professional solicitors, according to an investigation last year by New York Attorney General Andrew Cuomo. Nearly half of the charities received less than 30 percent of the funds. Cuomo found dozens of instances, including several involving InfoCision, in which the charity got less than 10 cents out of every dollar given.

It's a national scandal.

And the only way to fight back is to spread the word about hanging up on telephone fundraisers. (Ignore junk-mail pitches, too.) That's because under the law these calls are entirely legal. The Supreme Court has bafflingly created a disclosure standard for nonprofits and their fundraisers that would never be tolerated in a commercial product.

Baltimore's own National Federation of the Blind pioneered legal protections for misleading charity pitches in the 1980s. Fighting a crackdown by North Carolina on fundraisers who were pocketing huge portions of donated dollars, the federation got the Supreme Court to rule that limiting the fundraising rake-off to a certain amount was unconstitutional. Even requiring companies to disclose fee percentages before accepting a donation impedes free speech, the court found.

A more recent Supreme Court case involved telemarketers who kept 85 cents of every dollar donated to help Vietnam veterans. If fundraisers say, "90 percent goes to the vets," and it's not true, regulators can allege fraud, the court found. But solicitors can stay out of trouble by leaving their cut unmentioned — and by not disabusing anyone of the assumption that the charity gets all the money. That's how they've done business all along.

So the Alzheimer's Association wants me to work, unknowingly and without pay, for InfoCision. It wants me to ask friends and neighbors for donations that would support the junk phone-call industry as much as Alzheimer's victims, according to the association's documents.

Not this year, Alzheimer's Association, and not any year in which you continue this rotten business practice.

The association defends this as a way to spread "awareness" about the disease. Part of my job would have been to hand out folders and brochures, not just hassle neighbors for money.

"The friends and family program is a really important part of the way we not only raise money but really get more people involved and educated," says Angela Geiger, the association's chief strategy officer.

The InfoCision caller had told me that 72 percent of donations are spent on services and people. But that appears to refer to the Alzheimer's Association's overall budget — not what was likely to happen to my gift. Checking an organization's IRS Form 990, Schedule G (guidestar.org is a great source) gives an unvarnished look at fundraising expenses. InfoCision did not respond to several detailed e-mails and phone calls.

One of the breathtaking aspects of questionable fundraising is the vigor with which supposedly reputable organizations such as the Alzheimer's Association defend their junk-call allies.

"The nonprofit industry is just weak on this," says Rick Cohen, the national correspondent for The Nonprofit Quarterly magazine and the former executive director for the National Committee for Responsive Philanthropy. "Given that most charities sign up with these people and defend these people, the best regulatory mechanism is sunshine" — publicizing the high fees.

If the industry won't police itself, the only solution for individuals is to assume that every solicitation by phone or mail — or even from friends — is tainted.

Come to think of it, maybe you shouldn't merely bypass the fundraiser and donate directly. Any nonprofit that engages in this kind of behavior may not deserve your gift in any form.

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