Charity that spends 80% on Administrative Costs

The BBQ Pit
1

I still get calls all the time from random charities – tonight from one supporting “The Armed Forces”. When I asked how much goes to the charity vs. admin & fundraising, they proudly told that 20% goes to the charity!

And yes, they reluctantly confirmed my math that 80% goes to admin & fundraising.

The worst part is, I know many (especially older) Americans who would gladly give to a charity supporting the Armed Forces without checking out the charity, and would waste 80 cents on every dollar.

What dicks.

2

This is why I don’t give to anyone soliciting for charities on the street. Besides acting like they’re my new best friend (“Hey, how you doin? Do you support the Red Cross/Planned Parenthood/some other good cause?”), I have no doubt that a huge part of whatever these folks collect goes to pay overhead.

I am very familiar with these charities and when I decide to donate to them, I will do something directly with them. I don’t need glad-handing in service of higher admin fees.
Roddy

3

My wife was working in the Russian Tea Room (a landmark Manhattan restaurant) during 9/11. A day after the towers fell, the Red Cross reserved an entire floor of the restaurant, at full restaurant prices, for an entire week. That’s probably hundreds of thousands of dollars of donor money so that RC “executives” could schmooze investment bankers over blinis and flavored vodka.

And all that time, my wife and the rest of the kitchen staff were spending every free moment they had making sandwiches - really, really good sandwiches - for the rescue workers downtown, free of charge. So yeah, I have no respect for certain “non-profits”.

4

I used to work for a non-profit company [not going to name names here] that you’d regularly see the admin offices getting new furniture, computers, etc., but hardly any $$ going to the programs they were supposed to be getting the money for. The bigwigs had all this nice stuff while us clerical folk and other staff had to put up with shoddy equipment, little-to-no supplies of any kind, and computer equipment that was almost 8 yrs out of date [as was the software].

5

Err, 80% overhead is awfully high, even by inefficient charity standards. Might want to send a note to the IRS or whatever organization checks on fraud, because someone’s probably running a con here.

6

I don’t give to ANYONE who solicits me in any way other than the US mail. Street or door to door solicitors…well, I’m sure that many people are honest and turn in all the cash they collect. I’m also sure that many people are not that honest, even if the charity itself is legit. Phone soliciting? Nope, never gonna get a(nother) dime from me. I used to donate to PBS regularly, but they WOULD NOT stop phoning me, after repeated requests.

If I’m at the museum or zoo, I’m quite likely to put money in the donations jar, or buy the overpriced souvenirs.

One of the newspaper columnists in this area used to report on “charities” that solicited by phone. Usually they were sound alike organizations, like the Metroplex Police Association, that had nothing to do with the official organizations.

7

One trick is to recognize the script they go off.

“We are calling you to thank you for your generosity in the past” is codespeak for “we got your name off a mailing list”. Another is what is mentioned above - the name is very close to, but not identical with, another, better-recognized organization - the Cancer Society of America instead of American Cancer Society.

Regards,
Shodan

8

I once $25 to a children’s charity, for years after, I got a high quality, glossy printed “magazine” from them, each month which begged me ofor more money. I have worked in printing, and soon realised that the cost of sending me out this material far outweighed my original donation.

I sent a letter, requesting them to stop - no response.
I phoned, requesting them to stop - no response.

So…
I used the production facility of the printing company I worked in to make a very real looking classified ad advising people not to donate to them and what happens to your money when you do under the “Announcements” section of a local newspaper, took a photo copy of the ad, and submitted it with my next “quit bugging me” letter. The effect was that it looked as if I had actually placed and run the ad, (which never left the production dept).

That got a response from their legal team PDQ. I sent back a letter explaining that I had not actually run the ad, but just sent them a peice of artwork. I also explained that the stalking techniques they used were disgusting, and please ensure that I was permeanently removed from their mailing list.

Never heard from them again.

Because their laywers were involved, I won’t mention the name of the organization, except it was a Canadian secular organization, who’s mission was to “feed the children”.

9

You didn’t receive a call from a charity. Instead you received a call from a professional fundraising organization. All they do is to call people for money and then send a small portion (15% or 20% or whatever) onto some charity that’s agreed to this scam. Generally the charity involved isn’t any of the big, legitimate ones you’ve heard of, but a small, local one. Sometimes, they’ll even do something like this; the supposed charity is, say an anti-drunk driving group, so they’ll start the call by mentioning something about not drinking and driving, and then when they say that 20% of the money goes to educational purposes, they can claim the cost of the call against that. Or there will be some sort of pamphlet in the mailing, so that they can claim the cost of the solicitation as “educational.”

10

If you want the straight dope on charities, check out Guidestar. If you review their 990s (kind of like their income tax filing) you will see a ton of info on how much their execs make, how much is spent on lobbying, etc.

Having worked for a 501c3 a couple of lives ago, I can attest to its usefulness.

11

I had a to-do with the Texas State Fraternal Order of Police a few years ago- another bogus charity. If you give them $10.00, you would be lucky if 25 cents of that went into any ‘good works’. Some of our correspondence:

"I contacted you in July regarding harassment from
your fund raising organization. They are calling me
again after my having asked them many, many times to
not call. I am on the “Do Not Call List” and have been
since June 2003. I have told them this many, many
times. This company calls me in cycles- sometimes once
a day for 10-14 days, sometimes several times a day,
and sometimes they take weeks off before starting a
calling cycle again. I have filed a complaint with the
FTC. Please provide me with the name, address and
phone number of your fundraiser since they will not
provide it to me. When I try to obtain any information
from them, they simply hang up on me and try again
later.

You should really reconsider having this company
fund-raise for you. It is well known that they keep
most of the funds raised and use deceptive practices
to raise the funds (implying they are officers,
implying they are a charity organization, implying
that you or your spouse has donated to them before,
etc). While you may be a charity, they are not and are
not allowed to call. I will definitely never donate to
them and will tell everyone I know about them (the
fundraiser, not your organization). I don’t see how
associating with this organization benefits you in any
way. Finally, what percent of the funds they collect
do you actually receive?"
From the FOP:
"I am very sorry that you are experiencing this inconvienence. In our original e-mail I requested you provide your area code and phone number so that I could personally have it removed from their files. I never recieved a response from you. I can not even investigate this issue without your phone number and area code.

These calls are computer generated and if your phone does not answer, it is reloaded for redial. It will call you back until a voice is picked up. If you have requested being removed and have not, I can and will look into it because it is our policy to respect any and all who do not wish to contribute.

Again, as a non-profit, law enforcement group we are exempt from the do not call lists. If you would provide me with your number I would see that it was taken from their calling data base. Futhermore, if you provide with a date and time I will investigate who is made this specific call and review the tapes of the conversation. As part of our agreement all conversations are recorded to assure quality control."
"I DID send you my phone number last time. Here it is
again: XXX-XXX-XXXX.

This is not a case or re-dialer error. I do answer my
phone and actually speak to a telemarketer who then
hangs up on me. This is not a mistake on their part as
it happens repeatedly. The last call I received this
time was made by “Chris” on 10-25-04 at 1:25 pm. The
one (at least the last one in that May-June series )
that prompted my last email to you was made by
“Darrell” on June 29th, 2004 at 9pm.

Please understand that these people call me
repeatedly, on purpose, apparently simply to annoy me.
It is NOT a mistake. I have spoken with them as many
as three times in a day. They have called me daily for
weeks before. Most times, I cannot even get the
sentence “Put me on your do not call list” completed
before they hang up on me, only to call again.

I suppose their reasoning is that if they don’t hear
the whole sentence, they do not have to honor the
request. I spoke to a woman who used to work FOP
telemarketing who confirmed this. Boy, did she have a
story to tell!

Anyway, this time, “Chris” hung up on me as soon as I
asked his name (typical). If they keep records, you
should check how many times they have a called me in
the last 3 (!) years. You will be impressed. It is
simply ridiculous. They have been asked repeatedly to
remove my name and refuse to honor my wishes.

You also didn’t answer my question regarding the
percentage collected that they actually give to your
organization. Is the FOP a 5013C or some other type?
What type? Are you not required to disclose that
information? I was not able to locate that information
on your website.

As you can tell, I’m quite aggravated. I hate to take
my aggravation out on you or your organization. Heck,
I’m an RN. We love police officers! Unfortunately,
your telemarketer is driving me nuts. I filed a
complaint about them last year, too. "
He refused to email me anymore after that…

12

These are actually professional fundraising companies, who do it for profit. They are literally in it for the money. The organizations they’re supposedly supporting do as noted get some of the proceeds but the bulk goes to the fundraisers - who are not affiliated to the charity in any way except that the charity hired the fundraisers.

http://nonprofit.about.com/od/fordonors/f/fundraisingcompanies.htm

This has a link to a site where you can find out information on how much the charity actually gets.

Do I think it’s a scam? Yeah to some extent. It’s conceivable that the charity has a net increase in spendable income by using the companies, which could possibly get money out of people the charity wouldn’t otherwise have touched.

But I donate directly if I donate at all.

Folks may remember the United Way scandal a couple decades ago, where some branches were using a nontrivial amount of their income on overhead and luxuries. Even with that, the United Way generally did better than the professional fundraisers in terms of the ratio of money spent on services to total money received.

13

Do what I do - ask for a public copy of their form 990 and audited financials. Tell them that you only give to organizations you have personally vetted. Any charity that does not have that easily available on the web or upon request and is doing professional fundraising just might have something to hide, since 501©3 organizations with revenues of over $50K per year are required to file a 990 or 990-EZ.

Just asking will usually shut them up and make them go away.

14

All non-profit software is about 8 years out of date anyway…it’s inexcusable that I, as someone who last programmed full-time in high school, could write a more useful reporting tool than the software we currently pay tens of thousands of dollars for. But I digress.

If the organization reporting 80% overhead is a 501(c)(3), they should be reported to the IRS. (And I’d also throw a word or two over to Charity Navigator about them.) If they’re not a 501(c)(3), they’re not a non-profit and they’ve got to be dead honest about that, because if you deducted “donations” that you gave to a for-profit off of your taxes you would be in a buttfuckload (this is the legal term) of trouble with the IRS.

15

A couple of people have said the same thing in this thread, and i’d be curious to know if there’s actually an overhead percentage specified in the law.

That is, are you suggesting that they be reported because 80% overhead breaks the laws related to charities, or just because you think 80% is too high?

I happen to think 80% is too high, but what i think might not be the same as what the law is.

16

The question is, how was the return on that investment? It may just be an unfortunate truth that you get way more money out of rich assholes when you wine ‘n’ dine them than if you, I dunno, sent some kid with unwashed dreads to their front door with a clipboard.

To pull some numbers out of my ass to make a point, $500,000 to make you $100,000,000 is a hell of a lot smarter than $1,000 to make you $100,000.

17

There’s no specific percentage in the law, no. And a good reason for that: if the IRS specified, say, 50% of revenues had to go to charity, and your organization had an extremely down fundraising year (as a lot have had recently), a lot of places might be in trouble with the feds.

But 80% going to overhead on a consistent basis–in that case the IRS would probably want to take a closer look. My experience–and this is only IME–is that the guys who will admit to 80% overhead might be closer to 90% in reality…or 100%.

18

I don’t see how the IRS would care, even if an organization consistently spent 80% of its costs on overhead year after year. Plenty of volunteer-run organizations out there whose only costs are overhead whose members do nothing but sit around and tell stories to each other. I’m certainly not going to send them a check, but they’re not breaking any rules. However, I suspect you’re absolutely right about the the last part. But the thing is, that’s true everywhere - the IRS would best spend their time closely investigating organizations not based on percentage to overhead, but on overall expenses. I’d rather they bust orgs for misreporting $2 million when their expenses are 25% rather than 20% than an org for misreporting $5000 when their expenses are 90% rather than 80%.

19

As annoying as they are, that’s why workplace charitable giving can be a good and convenient route. To be approved as a “worthy” charity and get a spot in the catalog that’s distributed to anyone who wants one, an organization has to have less than a 13% overhead. And in the little booklet they give us, the organizations are listed along with their overhead percentages, so that you can be an informed donor.

20

This is true. Before the telemarketing laws went into effect, I used to ask telemarketers that claimed to be soliciting for charity for paperwork to be sent through the US mail. I didn’t know the exact forms to ask for, but I told them that all legitimate charities knew which forms to send. I usually had the telemarketer claiming that s/he needed a pledge in order to justify sending the forms, but I told him/her that it worked the other way around…I had to have the forms in my hot little hands to justify sending a donation.

This usually seemed to get me off of THAT calling list.