When a group has a fundraising activity and says “a portion of the proceeds will be donated to charity,” is there any legal requirement on the percentage of the proceeds that must be donated? Many gumball machines and candy displays near checkout stands have some statement like this. And there are big corporations which have promotions where, on a certain day, they’ll donate a portion of the proceeds for all the whatevers sold. But could they legally just send one dollar to the charity even though they raised a million dollars?
No legal requirement at all. One dollar would do it.
A big corporation will usually send most of the money made to the charity, but smaller scam groups will send next to nothing. There are some “charities” that give 10% or less of their fundraising to the cause they support – the rest goes to “administration.”
Some pro fundraisers go to a local group and offer them a sum – say, $10,000 – to do raise money in their name. Then they get $40,000-50,000 or more in donations and keep all but the $10K. The people they are “working for” think they’re getting a great deal.
I believe it varies with locale. Some state or local governments will have such requirements, but not all. I remember years ago when the Chicago Bears Shufflin’ Crew recorded “The Super Bowl Shuffle” with a line in the song saying “the Bears are doing it to feed the needy,” they got in trouble with some entity–the city of Chicago?–because the percentage they intended to give was less than the legal minimum.