I get several calls per week from various annoying telemarketers, ranging from “Heather from Card Services” to the “free alarm system” scam to some really questionable charities. The charity that called me yesterday was The Wishing Well Foundation. Because the name sounds suspiciously like Make A Wish, I was immediately on alert.
So while the telemarketer is giving me the pitch, I looked on Charity Navigator for information about their financials. It turns out that less than 10% of their revenues goes to their program, which is theoretically about helping sick kids. Somewhere around 86% of their budget goes to paying for fundraising, which appears to mostly be all fees and commissions paid to telemarketers.
My question is this: on Charity Navigator, there seem to be a bunch of charities that have extremely high fundraising budgets, leaving little money left over to actually do charitable work. Are some charities set up as a telemarketing jobs program to benefit the telemarketing firms and owners of said firms?
I have no personal factual knowledge of such things, and just want to suggest that a brand-new charity would have a lot of initial costs while they are in the process of trying to become more well-known. Such a charity would have a very high budget-to-charity ratio even if they were truly honest and generous, because that’s what start-up costs are about.
A charitable interpretation and no doubt correct for some slim number of charities, but I’d have trouble accepting it for more than the first year.
If I was going to donate more than a trivial amount (under $20), I’d look into the salaried staff and see how many charities they had formed and/or worked for. I suspect there are “serial charities” that are formed and re-formed repeatedly to hide poor income to distribution ratios, with the organizers never missing a paycheck or expense reimbursement.
I just wish charities, politicians, and everyone else had to abide by the Federal DNC list. When you have a household member who works a weird schedule, the choice can come down to “do I let the family member get enough sleep to be able to drive/work safely or do I keep the phone ringer on so I can get needed inbound calls?”, and I resent that there are some privileged groups who can thumb their noses at my wish to not have to make that choice.
I never donate to charities that solicit over the phone. I just assume that telephone fund-raising will always be at least a semi-scam. Also, I’m not about to give my credit card number to someone who calls me.
The Tampa Bay Times ran a big piece about bad charities recently. One of the worst is the Wishing Well Foundation USA. Here is the detailed description from that paper. (Now, to be fair, it’s possible that’s a different group than the one that called you, but if it’s not, I hope you didn’t contribute.)
And yes, some of these charities exist only to enrich the owners and organizers.
Read the Tampa Bay Times article it is really depressing. They had a link to it on the CNN website a month or two ago. There are a ton of scams with names similar to real charities trying to get money by having names that sound like real charities. One of the things I learned from the article is that cold calling for donations is one of the key indicators that it is a charity that will put most of its money back into fundraising instead of good works.
It’s also possible that a well-meaning charity got hooked into an expensive fundraising contract that didn’t pay off. If you ever start a charity, you can count on being bombarded by calls and letters saying “For just $10,000, we can get you $100,000 in donations! The more you pay us, the better the world becomes!” Then the fine print says “$10,000 a month based on a 2-year contract. $50,000 in one-time setup fees. No guarantees that you ever receive a dime.” In these cases, the “criminals” are the fund-raisers rather than the charities.
But, yes, there are charities out there which are not well-meaning and which exist to enrich the founders.
Having read that article I am surprised that anyone donates anything. We in the UK don’t have nearly so much fraud as charities are pretty tightly regulated. That’s not to say that there is none.
A popular one just now is the charity bag collection. I get three or four of these bags a week asking for surplus clothes, toys etc to be left out in the bag. Some (many) of them are simply scams and have no connection to any charity. Even the genuine ones are not safe, as the crooks (mostly East Europeans) simply steal the bags.
Many years ago I worked as a collector for (as I thought) a reputable cancer charity. The charity was OK but the people I worked for were not. I was paid 10% of all the cash I collected. The team leader (5 of us in a team) got his 10% plus 10% of what we collected. His boss got some and so did his bosses boss. All in all I worked out that the charity got less than 10% of what we collected. I quit.
I remember this automated solicitation calls I was getting from a 705 area code. It supposedly represented the youth foundation and to opt out, I could press 2. I did several times but the calls continued. When I Googled the phone number, several complaints came up at [link redacted by moderator] associating the number to harassing solicitation calls.
I recall a piece CNN did on just such a charity (i.e. the vast majority of proceeds were being spent on their fundraising program).
They discovered that the charity had contracted with a professional fundraising company (which was NOT a charity) to help them get started and (here’s the source of the problem) chosen a direct marketing campaign which is expensive and has a poor-to-middling ROI (return on investment).
The situation got a bit murky after that, with the charity on one side saying ‘we didn’t know how expensive and poorly performing that campaign-style would be’, and the (fundraising) company on the other saying ‘we warned them it would be expensive and might not perform as well as they’d hoped’.