California Lists Activities of Commercial Charity Fundraisers

It's not against the law to earn a profit by soliciting money for charity. But consumer advocates say there needs to be more transparency, so potential donors know how much of their contribution goes to the cause and how much goes to the fundraiser's bottom line.

Toward that end California Attorney General Kamala Harris has released a report on the activies of commercial fundraisers in the state. Her data shows that for-profit fundraisers in California raised $362.9 million in 2010, of which charitable organizations received less than 45 percent.

This represents an increase from the 2009 total of less than 43 percent. The data is included in the California Department of Justice's Annual Report of Commercial Fundraisers, produced by the Charitable Trusts Section.

"The data in this report allows donors to make informed choices this holiday season," Harris said. "Commercial fundraisers play a role in supporting charities in California, but it's important for donors to know how much of their money will be used to support the charity's programs, and how much will go to fundraising expenses."

Charities that hire fundraisers

Among numerous other tables, the annual report contains an alphabetical list of charities that hired commercial fundraisers in 2010 - along with the total revenue raised in those campaigns and the dollar amount and percentage of total funds raised that went to the charity.

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 the Attorney General'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 the Attorney General's office, commercial fundraisers collected $362.9 million in donations in 2010. On average, $161.1 million - or 44.38 percent of the funds raised - went to the charities. The remainder was retained by the commercial fundraisers as payment of fees and expenses.

When asked by a solicitor to make a donation, the American Institute of Philanthropy suggests consumers follow these steps:

• Ask the solicitor how a donation will be distributed.
• Ask what percentage of donations will be used to pay for fundraising expenses.
• Ask if the solicitor works for a commercial fundraiser and is being paid to solicit.
• Avoid cash donations.
• Avoid giving credit card information to a telephone solicitor or in response to a telephone solicitation.
• Learn about a charitable organization, its activities and its fundraising practices before giving.