Commercial Fund-Raises May Keep More Than Half the Money They Collect Ostensibly for Health-Related Charities

An article in the Los Angeles Times analyzed how much money a variety of charities, including some well-known health related charities, spend on commercial fund raising. In summary,

A Times investigation found hundreds of other examples of charities that pocketed just a sliver of what commercial fundraisers collected in their names. Some didn't get a dime or even lost money.

According to a comprehensive review of state records filed over a decade, the problem of paltry returns extends well beyond what has been reported in recent years among benevolent societies for police, firefighters and veterans. It affects charities large and small, well-known and obscure. It spans a range of causes, including child and animal welfare, health research and opposition to drunk driving.

In more than 5,800 campaigns on behalf of charities that were registered with the state attorney general from 1997 to 2006, the fundraisers reported taking in $2.6 billion. They kept nearly $1.4 billion -- about 54 cents of every dollar raised.

For-profit campaigns, which often employ telemarketing, mass mailings or one-time events, account for a small fraction of $223 billion in charitable giving each year in the United States. But they collect significant sums and help shape public perceptions of charities. Pairing computer-controlled dialing systems with low-wage workers, such firms can reach a large number of people in a short time.

The Times included a data-base which listed for each charity "all commercial fundraising campaigns reported to the state from 1997 through 2006, excluding those involving thrift store sales or vehicle donations. The data cover both California-specific efforts and national campaigns that included solicitations within California."

A few well-known national health care charities on the list received less than half the money their commercial fund-raising campaigns collected:

• American Diabetes Association 35.1%
• American Lung Association 31.8%
• Susan G Komen Breast Cancer Foundation 37.6%
• Arthritis Foundation (San Diego Area Chapter) 37.4%

Note that many more received barely more than half. Many more obscure health related charities also received less, sometimes much less than half.

So, if you get annoyed by those telemarketers who call you to raise money for a health care charity (despite your listing on the national "do not call list"), you have reason to be. Donations to some health care not-for-profits mainly benefit the fund-raisers they hire, rather than the causes the ostensibly support.

Once again, this demonstrates that some health care organizations seem to do a better job enriching the well-connected than fulfilling their missions.