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21 November 2011

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Charitable Fundraising

a Problem Business

 

Charities are work hard at persuading people to

support their causes, sometimes they hire

outside businesses to boost their incomes

 

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.

 

Mara

Donations to the Red Cross go towards helping refugees, among other services, such as here in Georgia.

 

Global Philanthropy provides legal services to non-profits in Canada. In a posting on its website it says, “According to the Canada Revenue Agency website there are currently 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.”

 

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 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 the donations in expenses to professional fundraisers.

 

Who Gives to Charity?

According to Forbes Magazine (December 2008) “Based on giving alone, the U.S. comes first, giving 1.85% of GDP, followed by Israel at 1.34%, and Canada at 1.17%. But, based on volunteerism alone, the Netherlands comes first, followed by Sweden, and then the U.S.”

 

Leave a Legacy says that in 2007 84 percent of Canadians made a charitable donation and that the total amount given was $10 billion. In addition, 46 percent of the population volunteered a total of 2.1 billion hours.

 

Charity Fraud

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

 

In August 2010, CTV 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 entered a guilty plea and was sentenced to 10 months of house arrest.

 

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.

 

The first line of protection is the Canada Revenue Agency list of registered charities. If the group asking for money is not on the list be wary.

 

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 asset is to donate 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 who have proper credentials;
• Give cash to a homeless street person: she or he will get 100 percent of the gift;
• Sponsor a friend or relative in a charity walk or run; and,
• Always check the validity of a charity at websites such as Charity Rank or Charity Navigator.

 

Sources

“Do We Have too many Charities in Canada?” Mark Blumberg, Global Philanthropy, June 12, 2008.

“Charities Paid $762 Million to Private Fundraisers.” CBC News, September 22, 2010.

“Who Gives the Most?” Elizabeth Eaves, Forbes Magazine, December 26, 2008.

“Alleged Cancer Scammer Appears Thin, Frail in Court.” CTV News, August 9, 2010.

 

© Canada and the World, November 2011

All rights reserved

 

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.

 

“Some of our best-known charities, the War Amps, the Terry Fox Foundation and the United Way of Greater Toronto, all received glowing grades of at least a “B+”.

 

“Overall, four of the charities rated received the top “A+” grade: the Mennonite Foundation of Canada, the Tides Canada Foundation, the IWK Health Centre Foundation, and the Jewish General Hospital Foundation.”

 

MoneySense Magazine

June 2010

 

 

 

 

According to the group Charity Watch, 24 Chief Executives of charities in the United States were paid more than $700,000 in 2010.

 

The highest paid was Harold Varmus of the Memorial Sloan-Kettering Cancer Center who received more than $2.5 million.

Charity Intelligence