N.Y. AG finds that for-profit telemarketers keep majority of charity donations

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman released his annual fundraising report Friday revealing that for-profit telemarketers retain the majority of donations raised on behalf of charities.

The report, "Pennies for Charity, Where Your Money Goes: Telemarketing by Professional Fundraisers," found that fundraisers in 2011 kept an average of 61.5 cents of every charitable dollar they raised, while only 38.5 cents per dollar went to charity.

"New Yorkers expect that their hard-earned dollars will make a difference and not line the pockets of for-profit fundraisers at the expense of charity," Schneiderman said. "During this season of giving when so many are still struggling to recover from Sandy, the generosity of donors must be protected. With this report, New Yorkers will be equipped with important information to help them decide which charities to support and to help ensure their contributions further charitable programs and services."

The report, compiled from fundraising reports filed with the attorney general's Charities Bureau, found that 467 out of the 602 campaigns examined kept less than 50 percent of the funds they raised, while 207 of the charities retained less than 30 percent of funds raised. In 76 of of the 602 campaigns, the charities lost money.

The Better Business Bureau's standards for charitable organizations set a limit of 65 percent of money retained as an acceptable amount, which was met by only 49 of the 602 campaigns.

As a result of the report's findings, Schneiderman has begun action to determine if New York's charities and fundraising laws have been violated, including looking into fundraising campaigns that repeatedly result in little to no money going to charitable programs or services. More than a dozen subpoenas have already been issued in the matter with more to come.