Trusted Charities Break Donor Trust When It Comes to Donations – Only 22% of Money Makes It

I was watching the Today Show this morning after going for a run and the story I caught floored me. They reported that only 22% of donated money actually makes it to charity when collected by telemarketers. This is backed up in an article on Bloomberg entitled “Charities Deceive Donors Unaware Money Goes to a Telemarketer“. We are not talking mom and pop charities here. We are talking about charities like The American Diabetes Association, The American Cancer Society, and more. If that doesn’t get you, paid employees of the telemarketers have passed themselves off as volunteers and (obviously) don’t disclose exactly how much goes to charity and how much is profit for the telemarketers. But it gets worse. Here is an excerpt from the Bloomberg piece that is outrageous at best,

In fiscal 2010, InfoCision gathered $5.3 million for the society. Hundreds of thousands of volunteers took part, but none of that money — not one penny — went to fund cancer research or help patients, according to the society’s filing with the U.S. Internal Revenue Service and the state of Maine.

Fees Added

Every bit of it went to InfoCision, the filings say. The [American Cancer Society] actually lost money on the program that year, according to its filings. InfoCision got to keep 100 percent of the funds it raised, plus $113,006 in fees from the society, government filings show.

Major charities compound the deception by encouraging telephone solicitors to lie. InfoCision scripts approved by both the Diabetes Association and the Cancer Society for what the telemarketer calls neighbor-to-neighbor campaigns in 2010 instruct solicitors to say, when asked, that at least 70 percent of the money raised will be used for charitable purposes.

Yet in contracts with InfoCision in that very same year, the association and society said they expected that the telemarketing firm would keep more than 50 percent of all the funds it collected.

Altogether, more than 5 million Americans volunteered to raise money for these two groups — and other charities that hired InfoCision — from their neighbors since 2005 after being pitched by solicitors using charity-approved scripts, according to state regulatory filings.

So the American Cancer Society hired a group to collect donations and ended up shelling out $113,000 for some telemarketers to rake in $5 million in “donations” which they kept and added fees to. What is more, according to the Bloomberg article, the charities themselves endorsed and encouraged lying to donors and enlisted the help of thousands of volunteers, who thought they were doing the Society a service. That is crazy. The more I think about it the more upsetting it gets. This is going to hurt some reputations big time and will hopefully lead to more transparent and upfront mandatory disclosures of exactly how much of your donation will go where they say it is going BEFORE you give.