Photo Courtesy of Attorney General’s Office
Attorney General Schneiderman’s recently released report found that one-third of charitable donations ended up in the pocket of the professional fundraisers.
By Forum Staff
Fully one-third of 2016 charitable donations ended up in the pocket of the professional fundraisers, according to “Pennies for Charity: Where Your Money Goes; Fundraising by Professional Fundraisers,” a report released last week by State Attorney General Eric Schneiderman.
Of the nearly $1.1 billion raised through campaigns conducted by professional fundraisers, charities netted just over $718 million, or 65.5 percent of the proceeds, while professional fundraisers kept $379 million, or 34.5 percent.
“New Yorkers should know how their charitable dollars are being spent,” the AG said. “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.”
New York has a “robust charitable sector,” Schneiderman added. Empire State residents gave a total of $17.2 billion in reported donations in 2015—the year covered by the report—the second-highest giving level in the nation, after California. Of this total, more than $1 billion was raised through 1,143 fundraising campaigns conducted by professional fundraisers on behalf of charities. These campaigns are the focus of the “Pennies for Charity” report.
The analysis and the searchable Pennies for Charity database that contains the data underlying it can be found at CharitiesNYS.com.
The “Pennies” report aggregates information from fundraising reports filed with the Attorney General’s Charities Bureau for campaigns conducted by professional fundraisers on behalf of charities in the previous year. Professional fundraisers must register with the Office of the Attorney General and provide closing statements that break down the revenue raised and the expenses generated by the campaign.
Schneiderman noted that this year’s report included a much bigger data set than previous years’ reports, as it focused on various mechanisms for fundraising in addition to telemarketing, which was the sole focus of prior “Pennies for Charity” reports and which was found to be the costliest fundraising mechanism.
Other significant findings include:
- In 239 campaigns, or approximately 20 percent of the campaigns covered in the report, the charities retained 70 percent or more of the funds raised, with 30 percent or less going to cover the costs of the professional fundraiser.
- In 622 campaigns, or approximately 54 percent of the total, charities retained less than half of the funds raised.
- In 192 campaigns, or nearly 17 percent of the total, fundraising expenses exceeded revenue, for a total loss of $16.7 million.
Schneiderman also pointed out that his Office actively investigates suspect fundraising practices. In 2015, the AG secured a $100,000 penalty against the founder of the National Vietnam Veterans Foundation and barred him from ever again serving as a director, officer, or trustee of any non-profit or charitable organization after finding that nearly 90 percent of revenue was spent on fundraisers and supporting his lavish lifestyle. And in the largest multi-state charity fraud action to date, Schneiderman, 49 other states, and the Federal Trade Commission secured a $75 million settlement ($3 million of which came to New York) against two affiliated sham cancer charities, and forced the dissolution of two other affiliates, which allocated only 3 percent of proceeds for their intended charitable purposes. The president was banned from profiting from any charity fundraising in the future.
