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All Donations Don't Make It To Charities
Percentage Of Cash Ends Up With Fundraising Company
POSTED: 1:10 pm CST November 28,
2007
UPDATED: 11:55 pm CST November 28,
2007
NASHVILLE, Tenn. -- How much money is actually going to charities after the cash is collected?Video: Some Donation Money Not Making It To Charities | SurveyThe Channel 4 I-Team discovered that money can and sometimes does end up in the pockets of someone the donor didn't intend the money for.Everyone gets the calls asking for donations, especially during the holidays.But in some cases, the charities get only a fraction of the money, with the bulk of the donations going to large fundraising companies that make the calls."I feel it's a disgrace because the people are giving, thinking they're giving to us,” said Melvin Spears of Tennessee Vietnam Veterans.Spears is the treasurer of the organization.Spears, a veteran himself, said he wants all money raised in phone solicitations to go to his wounded comrades.But documents filed with the state show that in a fundraising campaign last year, the company hired to make phone calls for the vets, Xentel Inc., raised $213,000, but only $25,000 went to the veterans.The rest went to Xentel, the fundraising contractor.“Someone is sitting there making easy money off the veterans,” Spears said.The National Veterans Organization made the deal with the company and many local vets aren't aware of it.Spears said he's ashamed of the deal with the company. But the Vietnam veterans are by no means the only charity that signs such contracts.The I-Team said it found page after page of state records showing charities and nonprofits that receive only 15 percent or less of donations made, with the rest of the money going to professional fundraisers."That's money that's never going to go to help the citizens of Tennessee,” said Todd Kelley with the Division of Charitable Solicitations and Gaming in Tennessee.“Are these charities making a mistake hiring these big fundraisers?” reporter Jeremy Finley said. “I think there are good fundraisers and not-so-reputable fundraisers,” said Lewis Lavine, who represents the Center For Nonprofit Management.Lavine said the nonprofit management agency believes charities should receive 80 percent of donations gathered by fundraisers.“We tell our nonprofit agencies to be careful who they hire,” he said.Documents show some fundraising companies make a healthy profit off donations.But some, like Xentel Inc., said they need that much money to conduct the fundraising campaigns and send material to donors. The I-Team asked Xentel to explain how it makes sense to run a $200,000 campaign with the charity only getting $25,000 of it, but a spokesman said he could not elaborate.Spears said he wants his national leadership to sever all ties with the fundraising company. Spears said he feels his own brothers and sisters in arms would do a better job.“We have people that are disabled and able people that would be willing to do it,” he said.So what can you do the next time your phone rings?Fundraisers are required to divulge to donors how much money goes to the charity if the donor asks.Don't be discouraged to give this holiday season, because there's a lot of worthy charities and nonprofits out there who need money.Why would these groups hire fundraisers in the first place knowing how little they could get? Some simply don't have a fundraising staff.Check out these links to see how your favorite charity raises money:
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