ECONOMY

Many charities across the US giving up your money to the marketers they hire

William La Jeunesse reports from Los Angeles

 

American households, on average, donate almost $3,000 a year to charity. About one-third is given in December, much in the last 5 days. But whether motivated by compassion or a tax deduction, roughly of half of individual donations do not go to charity, but the solicitors and telemarketers they hire.

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"There's fundraising contracts where up to 85 to 90 percent of the money is going to the professional fundraising company," said Daniel Borochoff of Charity Watch.

To test that, Fox News examined three years of audits generated by the California Registry of Charitable Trusts, a listing of many national campaigns. In hundreds of cases, charities raised thousands but got little back -- and some actually lost money.

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For example, in 2013 the NAACP hired a telemarketer to raise money. The company raised $307,000 but spent $335,000, leaving the NAACP with a $28,000 loss. The NAACP declined to comment.

In 2014, the Covenant House for at-risk kids raised $66,072 but the charity got billed for $209,000, a loss of more than $140,000. In a statement, the Covenant House said it used a telemarketer on a "pilot basis... to convert current Covenant House donors to monthly donors" but ended the program in 2016 to focus on "web and online" giving "which is even more cost efficient than telemarketing."

In 2015, the Environmental Defense Fund ran seven fundraising campaigns. Two made nothing and four lost money, costing the non-profit more than $60,000. In a statement, the EDF said campaigns we referenced were designed to "attract new supporters," not raise funds.

These charities were not alone. In 2015, 24 percent of U.S. charities took home less than 20 cents on the dollar and 21 percent lost money altogether. Figures in the two previous years were nearly identical.

"At Charity Watch we think it shouldn't cost more than $35 to raise a hundred dollars. That's our standard for reasonableness," said Borochoff.

But that is a high bar. Over the last three years, almost 80 percent of all charities failed to keep at least 65 percent of their donations. But it's not illegal. The U.S. Supreme Court ruled that states cannot regulate how much of any donation actually goes to a charity, leaving consumers on their own.

Experts say to check the ratings systems of either Charity Watch or Charity Navigator before giving. Also, the Pennsylvania and California Attorneys General Offices keep multiple years of records on file of most national charities. Otherwise, analysts say to consider following these recommendations.

1.  Don't give to charities you don't know.

2.  Don't be fooled by a familiar names.

3.  Don't be pressured.

4.  Don't give cash or credit card numbers. Write a check.

5.  Don't give over the phone.

6.  Pick a charity you know and trust and give to it directly.

William La Jeunesse joined FOX News Channel (FNC) in March 1998 and currently serves as a Los Angeles-based correspondent.