The Better Business Bureau issued a warning to consumers about a group of children's charities that funnel only a small percentage of donations to the causes they're supporting.
An investigation by BBB said the charities, which solicit nationally, used professional fundraisers to raise cash that gave less than 20 cents on the dollar - some as little as 1 penny per dollar donated - to the actual cause.
The charities used as examples by the BBB in St. Louis, where a direct-mail marketer is located, include Kids Wish Network, Children's Cancer Fund of America, Autism Spectrum Disorder Foundation, National Cancer Assistance Foundation -- which operates Children’s Cancer Dream Network, Children’s Cancer Assistance Fund and Breast Cancer Assistance Fund.
The most extreme case the BBB investigation found was for the Children’s Cancer Dream Network, which is part of the National Cancer Assistance Foundation. The charity reported raising $1.2 million in 2010 and spending $15,600 directly on cancer patients and their families.
"It's a sad reality that there are children’s charities that feel they have to contract with expensive outside fundraisers to bring in money,” Jim Judge, the BBB's director of charity review said. “Profit-making fundraising companies sometimes take $8, $9 or more from every $10 donation, leaving the charities with pennies.”
Here's what the BBB found about those charities:
- Kids Wish Network of Holiday, Fla., a wish-granting charity for ill children. The charity reported that 10 fundraising companies raised nearly $16 million on behalf of the charity in 2010, the most recent year in which information is available. Of that, about $1.9 million went to the charity, or 12 cents of each $1 donation.
- Children’s Cancer Fund of America of Powell, Tenn., a charity that assists families of children with cancer. The charity reported that six fundraising companies brought in $8.4 million in 2010. About $1.6 million of that total – or 19 cents of each dollar – went to the charity.
- Autism Spectrum Disorder Foundation of Schererville, Ind., a charity that addresses childhood autism issues. The charity reported that its three fundraisers raised nearly $2.6 million in contributions in 2010. Total to the charity: $164,000, or about six cents of each $1 donated.
- National Cancer Assistance Foundation of Sarasota, Fla., . Two fundraising companies took in $1.8 million in donations on behalf of the charity in 2010. The total paid to the charity: $143,000 or eight cents of each $1 in donations. Precision Performance Marketing, a St. Louis County-based business that does direct mail fundraising work for the charity, kept $792,000 of $817,000 it raised for the charity, leaving the charity with three cents of each dollar donated.
- National Children’s Leukemia Foundation of Brooklyn, N. Y. which says it funds leukemia research, family outreach and other programs. The 2010 990 report says three fundraisers brought in nearly $3 million. The charity ended up with 20 cents of each $1 raised.
And the BBB had this advice for donors:
- Find out if the fundraising campaign of any charity that solicits you is being run by a profit-making fundraiser. Ask how much of your contribution will go to the charity and how much will be retained by the fundraising company.
- Before donating, ask for written information about a charity’s programs and finances – especially if you are unfamiliar with the organization.
- Don’t bend to pressure to give money immediately. A charity that wants your money today also will welcome it at a later date.
- Be cautious about charities that use names similar to well-known national organizations. Sometimes, an organization will choose a name hoping that donors will confuse it with the better-known charity.
- Check a charity’s IRS “Form 990” report by visiting www.guidestar.org. The Internal Revenue Service requires most tax-exempt organizations to file a Form 990.
- For more information on a charitable organization check www.bbb.org.
The author is solely responsible for the content.
About the author
Mitch Lipka is one of America's leading consumer journalists and advocates. He is an expert in product safety, recalls, scams, and helping consumers get out of jams. He is a nationally known consumer columnist and runs TheConsumerChronicle.com. He lives in Worcester. You can find him on Facebook or reach him at ConsumerNews@Aol.com