Attorney general warns of charitable fundraisers
By LOUIS PORTER VERMONT PRESS BUREAU | December 08,2009
MONTPELIER — Attorney General William Sorrell warned Vermonters on Monday to make sure where the money is going if they donate to charities that hire professional fundraisers.
Charitable groups using paid fundraising companies gathered $8.4 million in Vermont over three years. But $5.7 million of that money — or nearly 68 percent — went to pay the fundraisers instead of covering the work of the charities, Sorrell said.
"I personally don't give to paid fundraisers. Other people are free to make different decisions," the attorney general said by telephone. "People can do with their money what they choose. I just think this is helpful information for the average person."
Sorrell added that the money that goes to charities via a paid fundraising company or organization is a small fraction of the $260 million a year given by Vermonters.
"It is a very small percentage that goes to campaigns collected by paid fundraisers," Sorrell said. But, he added, it is "real money coming from Vermonters."
Under state law, charities that use paid fundraisers must report to the state when they are conducting such a fund drive, how much is raised, how much goes to the charity and how much to the firm that does the work.
According to the data, he said, Vermonters tend to give to in-state charities more than out-of-state ones. But the in-state charities that use paid fundraisers also receive on average a lower portion of the money collected, he said.
Among the Vermont charities that use those services, several stand out for the amount raised, according to the report.
Those include the Professional Firefighters of Vermont, Special Olympics of Vermont, Vermont Troopers Foundation and the Vermont Police Association.
But the percentage that goes to the paid fundraising firms is not the whole story, according to executives with some of those organizations. While other nonprofits have their own internal fundraising staff or have a group of volunteers to staff phones, others do not, or they provide services in exchange for the money, services that are sometimes included in the cost of fundraising.
"Unlike some organizations that will do some of the fundraising themselves" the charitable arm of the Vermont State Troopers' union has for more than two decades hired the same company to publish its magazine and sell advertising in it — all of which is listed as a fundraising expense — said Mike O'Neil, president of the Vermont Troopers Association.
"It looks like an enormous amount is going to the company doing it for us," but many costs, including telemarketing, are included in that amount, he said.
There is a roughly 25 percent to 75 percent split between the troopers and the company that does its fundraising and publishes its magazine, O'Neil said. The money received by the foundation "is used by the union for member assistance, running the day-to-day operations of the union," he said.
The Professional Firefighters of Vermont are in a similar situation, said Ben O'Brien, the group's secretary and treasurer. The group has a roughly 20 percent to 80 percent split with its fundraiser.
"A majority of the costs cover overhead for fundraising," O'Brien said. "This is really the route we have to do to raise revenue. It is hard to put firefighters on the phone to raise money."
And, unlike most other fundraisers, the firefighters give out tickets to shows at the Champlain Valley Exposition Fairgrounds twice a year, a cost that is included in that 80 percent overhead, O'Brien said. In fact, once expenses are taken out, the association and the fundraising company split the proceeds, he said.
The association also uses its money to advocate for things that help the public and firefighters, like improved smoke detectors, he said.
"There are a lot of jobs we do and there has to be the means to go about doing them," O'Brien said.
The professional firefighters were the most successful of all of the charities that use paid fundraisers, gathering $3.2 million of the $8.4 million received over three years through those efforts by all the nonprofits that hired fundraisers.
But many charities have volunteers do their fundraising, meaning that more of the money goes to the cause, Sorrell said.
"This is the time of year that people tend to give more to charitable causes," Sorrell added. "Be generous but give wisely."