Who is actually profiting from nonprofits?
Half of the charities in the state saw half of the money they raised last year go into the pockets of professional fundraisers and concealed contractors, according to a new report from Attorney General Eric Schneiderman’s Charities Bureau.
The“Pennies for Charities: Where Your Money Goes” report released Thursday analyzed the billion dollars raised by1,143 fundraising campaigns in 2015 by contractors and the professional fundraisers who run telemarketing, email and Internet-based campaigns on behalf of nonprofit organizations.
The report states that 54.4 percent of the charities included in the research retained less than 50 percent of the funds raised. And 36.3 percent of the charities were able to keep less than 30 percent of the money raised.
The report found that overall, professional fundraisers and contractors kept over a third, 34.5 percent, or $379.37 million raised for charities last year.
Yet many nonprofit operations are not in a position to do away professional fundraisers.
“Small and even big charities sometimes don’t have the resources or wherewithal to do it themselves. The fundraisers are experts in their field,” a spokesperson for the Office of the Attorney General told Metro.
Determining the true amount of fundraisers’ cuts is also getting trickier because fundraisers are increasingly using methods that allow them to sidestep reporting their costs to state regulators, the report said. Professional Fundraiser Registrations (PFR), from which the Charities Bureau requires detailed statements, have decreased in the last decade, while Fundraising Counsel (FRC) registrations (similar to political consultants), which allows for less disclosure, have increased nearly 40 percent in 10 years.
“New Yorkers should know how their charitable dollars are being spent,”Attorney General Schneidermansaid. “Our Pennies for Charity report shines a light on the portion of charitable dollars that is pocketed by outside fundraisers, and our Charities Bureau will hold unscrupulous or fraudulent fundraisers accountable.”
The Pennies report’s primary purpose is to inform donors of how to give judiciously and be more aware of how much of their money will actually benefit the causes. It advises that donors to refer to the Pennies for Charity database on www.CharitiesNYS.com to look at the performance of professional fundraisers and charities.
For instance, a search for the Robin Hood Foundation brought up its 2015 figures which showed that 70 percent of funds raised, or $25 million, went to the charity itself, while its registered professional fundraiser, Event Associates, Inc., took in 30 percent of receipts.
The Charities Bureau recommends using a method of shrewd vetting and giving that includes:
- Researching the charities using the tax returns available on the bureau’s website, as well as itsPennies database.
- Never donate by cash or wire transfer
- Donate via secure web addressesThe web address should always begin with “https.”
- Resist pressure to give on the spot.Don’t feel pressure to give on the phone or when cornered on the street.
- Ask how your donation will be used.Avoid organizations that make emotional appeals that don’t properly answer your questions
- Report suspicious organizations to firstname.lastname@example.org (212) 416-8401.