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Some fund-raisers soil charities’ image

Published 9:00 pm Thursday, November 29, 2001

Herald Writer

Two-thirds of the state’s commercial fund-raisers keep the majority of the money they raise on behalf of charity, and there’s little government can do about it, regulators said Thursday.

"I am concerned that there are a number of major fund-raising organizations registered in this state that are mainly making money off this," Secretary of State Sam Reed said.

Reed joined state Attorney General Christine Gregoire Thursday in releasing a report on the money collected by commercial fund-raisers last year and how it was distributed. The report focuses on the private businesses that collect on behalf of charities, not the charities themselves.

It showed:

  • Of the $357 million collected by professional fund-raisers in Washington last year, $196 million, or 55 percent, went to charities.

  • Twenty four of the fund-raisers gave less than 20 cents of every dollar raised to their charity clients.

  • About two-thirds of the fund-raisers gave less than 50 percent of the money raised to charities.

    Reed noted that federal court rulings prevent the state from passing any laws requiring that a minimum amount go to charities or from requiring the commercial fund-raisers to publicize how much of what they collect goes to clients.

    "Really, it’s a buyer-beware situation," Reed said. "We want to make sure they’re giving to organizations they have a comfort level with when they are contributing on behalf of a charity."

    Commercial fund-raisers are companies hired by charities to solicit money for them, often through telemarketing or direct mail. Legally, they must register with the state and report their finances, although not all do.

    Some of the commercial companies pass along every dime they collect. For example, National Community Development Services Inc. collected $3.9 million in Washington state last year and gave it all to the Economic Development Board for Tacoma/Pierce County.

    But others give much less.

    Bargain World Inc. of Federal Way collected $2.5 million on behalf of Children’s Home Society of Washington and the Family Renewal Shelter and gave only $36,000 to charity, or 1.4 percent.

    Snohomish County’s three commercial fund-raisers had widely varying contribution rates.

    ATS NW Inc. of Lynnwood was listed as contributing 14.8 percent of the $672,307 it collected. A phone call requesting comment was not returned.

    John Fahnestock and Associates of Lynnwood collected $188,500 for Snohomish County Volunteer Search and Rescue and gave 35.8 percent, or $67,550 to the organization.

    Fahnestock said the amount was a good one, given the expenses involved.

    "We have to pay people to fund-raise for us, and therein goes the expense," Fahnestock said. "Everybody involved in our operation is either a member (of search and rescue) or a local resident."

    Legacy Telemarketing Corp. of Everett had one of the state’s higher contribution percentages, providing 67.5 percent of the $375,588 it raised to the Red Cross. A company spokesman had no comment.

    Reed said the purpose of the report was not to discourage people from giving. "There are many worthy organizations that need our support," he said. "Our hope is to help protect consumers with the most effective tool available: information."

    He recommended that before contributing, people:

  • Ask if the solicitor is a charity volunteer or paid commercial fund-raiser.

  • Find out what percentage of the amount raised by the organization goes to charity.

  • Ask how the money will used.

    You can call Herald Writer Mike Benbow at 425-339-3459

    or send e-mail to benbow@heraldnet.com.

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