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Charities Get Less from Phone Solicitors

Solicitors keep two-thirds, study finds

November 14, 2007

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A report from Connecticut finds that less than a third of the money raised by paid charitable phone solicitors during 2006 was passed on to groups that hired them -- one of the lowest levels in a decade.

According to the 20th annual joint report by the Attorney General's Office and Department of Consumer Protection (DCP), last year's rate rivaled the approximately 32.8 percent turned over in 2004 and 1997, the lowest two of the last ten years.

The amount was down nearly two percentage points from 2005 when paid phone solicitors turned over an average of 34.45 percent.

"Year after year, more than two-thirds of charitable contributions made through telemarketers fail to reach groups that hire them -- draining countless dollars away from good causes," Attorney General Richard Blumenthal said. "Last year's level -- less than a third to charities and nonprofits -- is unacceptably low."

"I urge nonprofits to drive a harder bargain or abandon the telemarketers entirely. These paltry proceeds should shock contributors, and they should insist on more money for worthwhile causes they support," Blumenthal said.

Blumenthal said consumers should think twice before donating money over the phone – that they would be better off giving directly, assuring their entire gift benefits the cause they wish to support.

he report found that paid phone solicitors raised $10.8 million for nonprofit, charitable and public safety organizations in Connecticut during 2006, slightly more than the previous year. Of that, $3.54 million or 32.79 percent went to charities and nonprofits, with telemarketers pocketing the remaining 67.21 percent.

According to the report, 113 Connecticut organizations hired commercial telemarketers in 2006 to conduct 121 in-state phone solicitation campaigns. Police and firefighter groups conducted most of the campaigns -- 92. They also received a slightly lower percentage of the funds -- 32.35 -- than the average for all groups.

"Americans are a generous people,” said DCP Commissioner Jerry Farrell, Jr. “But as consumers and donors, they need to think twice and do research before reaching into their wallet to make a charitable donation.”

The report separately lists 224 charitable organizations that conducted 322 multistate phone solicitation campaigns in which they contacted Connecticut residents as well as those of other states.

Blumenthal and Farrell suggested rules for consumers contacted by paid charitable solicitors:

• Make sure you are clear which organization is asking for money. Many charities have similar names.

• Ask how and where the donation will be used. Don't accept vague answers.

• Ask whether the person calling is being paid and what percentage of the donation goes to the organization.

• Never agree to give over the telephone; ask the solicitor to mail you information.

• Never give cash or agree to have someone pick up a contribution.

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