December 4, 2009
There are a lot of people raising money for charity, but not all are unpaid volunteers. A close look might show that a significant portion of those soliciting funds for good causes are being paid to do so.
In California, Attorney General Jerry Brown has released a report showing that, while 1,359 commercial fundraisers in California raised almost $400 million in 2008, charitable organizations received less than 42 percent of those funds.
"Some commercial fundraisers do an excellent job of ensuring that the vast majority of funds they raise go to the charities, not to overhead or themselves. Others raise little, or worse, leave the charities in the red," Brown said. "Donors should do their homework before giving and consider how they want their contributions spent."
Commercial fundraisers, who are hired by charities to raise money on their behalf, typically charge a flat fee for their services or a percentage of the contributions they collect.
By law, commercial fundraisers must register with Brown's office prior to fundraising in California and must file annual financial disclosure reports detailing income and expenses for each fundraising campaign.
According to reports filed with Brown's office, commercial fundraisers collected $399.9 million in donations in 2008.
In total, just $167.6 million-or 41.9 percent of the funds raised-actually made it to the charities. The remainder was retained by the commercial fundraisers as payment of fees and expenses.
These figures, however, are averages and do not provide the full picture. Some charities received the vast majority of funds raised on their behalf, Brown said.
