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Problems With Charitable Fundraising

Updated on May 10, 2017

Mail-outs, telemarketing, radio and TV ads, newspaper and magazine pitches, retail check-outs (Would you like to give a dollar to support this, that, or the other?), neighbours on the front doorstep, and eager young people accosting prospects on the street. People are bombarded with constant appeals to their generosity to give, give, and then give more. There are so many groups out there in need of money.

The National Center for Charitable Statistics (NCCS) keeps track of charities in the United States; it says 1.5 million non-profits are registered. The Daily Mail says the number in the United Kingdom is close to 200,000. The Global Philanthropy Group says there are “83,500 registered charities in Canada. There are probably something in the range of 160,000 non-profit organizations, but, as many are not even registered, it is difficult to know exactly.”

Source

Fundraisers Take a Cut of Charitable Giving

Finding a way through the clutter created by so many groups trying to leverage a gift is a serious problem for charities. Nobody can give to everybody who asks for money so choices have to be made.

Some charities hire professional fundraisers to help them pitch their brand, but it can be an expensive venture.

A Canadian Broadcasting Corporation (CBC) investigation found that, “Canadian registered charities paid $762 million to third-party fundraisers between 2004 and 2008, all of it deducted from donations and often dwarfing guidelines set out by the Canada Revenue Agency.”

The agency recommends that charities should not spend more than 35 percent of their revenue on fundraising. The CBC investigation uncovered more than 200 charities that paid in excess of half of their donations in expenses to professional fundraisers.

In one case, the Alzheimer Society of Saskatchewan, raised $95,812 in a campaign run by a professional fundraiser but paid out $96,849 for the company’s services.

The story is similar in the United Kingdom. According to a Daily Mail investigation “while registered charities claim that almost 90p in every pound donated is spent on ‘charitable activities,’ many spend at least half their income on management, strategy development, campaigning, and fundraising – not what most of us would consider ‘good causes.’ ”

This is one way to ensure that all of your donation goes to a cause you support.
This is one way to ensure that all of your donation goes to a cause you support. | Source

Massive Duplication

When the devastating earthquake hit Haiti in 2010, the charity fund-raising machine slipped into its top gear. Nothing pries money loose from bank accounts more than a human disaster.

The first priority is to get photos of anguished citizens dealing with the tragedy of a lost child or home. The heart-tugging copy is almost boiler-plate and only needs to be tweaked a bit to change location and catastrophe.

Source

Shortly after the Haiti aftershocks faded, folks with the best intentions in their hearts started to arrive. Before long they were tripping over each other and getting under the feet of professional relief workers who knew what they were doing.

A church group from Texas turned up in Port-au-Prince without water supplies or transportation arranged, two of the scarcest and most sought-after commodities. They ended up being a burden to the aid agencies who had to divert efforts from Haitians until they could get the Texans out of the country.

Elsewhere, charities can get in each other’s way. Canada, in common with many other countries, has numerous cancer charities. There’s the Skin Cancer Foundation, Childhood Cancer Canada, Colon Cancer Canada, there are individual charities for many organs – bladder, colon, testicles, ovaries, pancreas, etc. In addition, there are countless foundations set up bereaved relatives in remembrance of someone they’ve lost to cancer. Each of these needs office space and administrators.

The clutter got so bad that two of Canada’s top cancer charities merged. In February 2017, the Canadian Cancer Society and the Breast Cancer Foundation of Canada decided to join forces and cut overlapping operations.

CBC Reporter Wendy Mesley Takes on the Canadian Cancer Establishment

Charity Fraud

Unfortunately, there are plenty of people willing to tug at the heartstrings of generous people to defraud them of money.

The cancer fraud is lucrative. Everybody has been touched by cancer in some way or another and they are primed to give. The Cancer Fund of America is based in Knoxville, Tennessee, and is affiliated with another group called Cancer Support Services. Those are legitimate-sounding names, but not so legitimate after the Federal Trade Commission started poking about in their books.

According to CNN these outfits “paid a total of $65.5 million, which represented 86.4% of the $75 million donated to those charities in that same time period (2008-12). The money went to pay for telemarketing calls, salaries and perks.” A total of 2.5% of the money collected went to charitable work.


Less ambitious swindlers seek to cheat friends and neighbours out of money. In August 2010, Canadian Television News reported on a scheme supposedly cooked up by 23-year-old Ashley Kirilow, of Burlington, Ontario: “Police say [Ashley] faked cancer and pocketed the money raised by supporters.” She got 10 months house arrest.

Seven years later, Sarah Lucas from nearby Hamilton, Ontario began serving a two-year prison sentence for a similar scam. A slight twist here was that she raked in $219,000 from a government disability support program.

Following the terrible earthquake that shattered Haiti in January 2010, the RCMP issued a warning: “In the wake of this tragedy, fraud artists are hoping to profit from people’s generosity. The RCMP would like to remind Canadians to be wary of false charity scams.” Every disaster stirs the scammers to action; give only to recognized, established aid agencies.

Source

How to Get the Most from Charity Donations

There are several ways to make sure a charity donation does its work:

  • Every charity needs volunteers so a very valuable way to help is to donate your time;
  • Give cash to a food bank rather than food. The bank can pool money and buy in bulk from brokers making a $50 donation worth $250 or more at retail prices;
  • Donate only to door-to-door canvassers that you know and have proper credentials;
  • Give cash to a homeless street person: she or he will get 100 percent of the gift; and,
  • Sponsor a friend or relative in a charity walk or run.

There are several ways to check the bona fides of charities. The Wise Giving Alliance is an initiative of the Better Business Bureau. Other organizations that keep an eye on charities are Charity Rank, Charity Navigator, Guidestar, and Charity Watch.

The Internet is the perfect tool for people pulling charity swindles.
The Internet is the perfect tool for people pulling charity swindles. | Source

Bonus Factoids

Charity a big industry; the Non-Profit Times put its global annual value in 2015 at $887 billion.

The Philanthropy Roundtable says that “of the $358 billion that Americans gave to charity in 2014, only 14 percent came from foundation grants, and just five percent from corporations. The rest - 81 percent - came from individuals.”

Americans are very generous. Between 70 and 90 percent of households give to charities every year and their average donation is between $2,000 and $3,000. This is about seven times more than is donated by Europeans. Canadians do a little better, but still only give roughly half of what Americans do.

Sources

  • “The Great British Rake-Off ... What Really Happens to the Billions YOU Donate to Charity.” David Craig, Mail on Sunday, November 15, 2014.
    “FTC: Scam Cancer Charities Kept Millions of Dollars.” David Fitzpatrick and Drew Griffin, CNN Investigations, April 1, 2016.
  • “Hamilton Woman Who Faked Cancer Gets 2 Years for Fraud.” Natalie Paddon, The Hamilton Spectator, January 18, 2017.
  • “Alleged Cancer Scammer Appears Thin, Frail in Court.” CTV News, May 19, 2012.
  • “Who Gives Most to Charity?” Philanthropy Roundtable, undated.

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    • MsDora profile image

      Dora Weithers 7 months ago from The Caribbean

      Many people are suspicious of the agencies. You give the facts and figures and that's very helpful. Thank you very much.