Report: Your Charitable Donation Is Going to Telemarketers, Not Charity

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‘Tis the season to give to charity. But a new report from New York Attorney General Eric Schneiderman finds that many of the donations New Yorkers are giving to charity are mostly going to line the pockets of telemarketing firms. The report found that more than 60 cents of every dollar raised by a professional telemarketing firm for charity goes to the firm itself. Out of 602 fundraising efforts examined, only 49 returned more than 65 percent of the money raised to the nonprofit. More than a third of the fundraising attempts returned less than 30 percent of the donor money to the charity, and in 76 of the campaigns, charities actually lost money hiring the telemarketers. Schneiderman has issued subpoenas to some of the entities in the report in an investigation into whether repeat offenders are breaking New York fundraising laws with their money-losing telemarketing schemes.

Consumer advocates have been saying for years that a lot of charitable fundraising doesn’t go to the needy. But the New York AG’s report comes at an interesting time, when Congress and the president have been discussing whether limiting the $50 billion in annual tax deductions Americans claim for charitable donations is a good way to shore up the nation’s finances. Nonprofit groups have risen up en mass to oppose the idea, but the AG’s report shows that despite claims by conservatives, the private sector is not especially efficient when it comes to serving the less fortunate. And since many of the beneficiaries of charitable donations (the telemarketers) are not even nonprofits, it’s not clear why such donations are tax-deductible in the first place.

Among the worst offenders on the AG’s list are some familiar organizations, many of which are politically involved. Among them is Tea Party Patriots, a group that has long had unusually high administrative and fundraising costs. Schneiderman found that in 2011, Tea Party Patriots, one of the largest grassroots tea party organizations to have come out of the movement, collected nearly $2 million in donations through telemarketers. Just $54,000 of that—less than 5 percent—went back to the organization. The telemarketers kept the rest. Also, it seems that tea partiers are good at promising telemarketers they’ll donate, but not so good about actually paying up. The report shows that Tea Party Patriots had $850,000 in pledges that went uncollected. For an organization that promotes fiscal responsibility, it’s not setting an especially good example.

(Note to conservative activists: If you’re looking to give to a tea party group over the phone, you’re probably best off giving to FreedomWorks, which was until recently run by a professional lobbyist and former member of Congress. FreedomWorks was one of the few groups examined by New York that got 65 percent of the money it raised through telemarketers. Of course, what it did with that money is another issue.)

The Family Research Council Action, Americans United for Life (an anti-abortion group), Ralph Reed’s Faith and Freedom Coalition, and the Concerned Women of America Legislative Action Committee, which ended up nearly $175,000 in the hole from one of its fundraising efforts, all had pretty bad records. But more liberal groups weren’t that much better. NARAL, the ACLU, and People for the American Way all ended up at the bottom of the report: their telemarketing efforts ended up costing them more than they made. It’s all just one more reason to hang up on telemarketers and send your donations through the mail. 

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WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

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