Vermont Attorney General: Paid fundraisers take 70 percent of cash for charities
MONTPELIER — In the past three years, Vermonters have given more than $7.8 million to charity through fundraisers contracted to solicit donations — but less than a third of that sum was actually received by the charities.
The Vermont Attorney General's Office released a report last week detailing the finances of paid fundraising firms that solicit donations on behalf of charities.
Some charities opt to contract with a third-party company to carry out the work of fundraising. Under the business model, charities not only pay for companies' fundraising services — they may also give the fundraiser a hefty cut of the total amount raised.
It isn't illegal to use paid fundraisers, Attorney General Bill Sorrell said Friday. But he wants Vermonters to know how the fundraisers work "to be smart in the charitable contributions that they give."
The Attorney General's Office tracks the figures through finance reports that firms are required to submit under Vermont law.
Some paid fundraisers take a small portion of the donations raised in the campaign. Vermont Public Radio kept 92 percent of the $187,869 raised in a campaign run by the company Aria Communications.
But the split is less favorable in many other cases.
Of the nearly $200,000 raised in Vermont through paid fundraisers for the International Union of Police Associations, AFL-CIO, less than 6 percent made it to the organization.
In more than one-third of the charitable campaigns that used paid fundraisers in Vermont, paid fundraisers kept 80 cents of every that was raised.
Only 22 Vermont charities used paid fundraisers in the three-year period, running a total of 57 campaigns. In that same period, 1,181 paid fundraiser campaigns occured in Vermont, almost all of them benefiting out-of-state charities.
The data shows that Vermonters tend to be more generous with local charities. Even though Vermont charities account for only 5 percent of the total paid fundraiser activity in the state, more than half of the money donated through paid fundraisers went to Vermont charities.
Until July 2014, the Professional Fire Fighters of Vermont contracted with FireCo, LLC to make solicitation calls on the charity's behalf.
Ben O'Brien, president of the firefighters group, said contracting with a paid fundraiser allowed his organization to dedicate time to efforts other than fundraising — things like raising awareness about fire safety month at elementary schools around the state in October, distributing winter jackets, and working with lawmakers on new legislation.
"Utilizing that kind of service allows us to be able to continue the work that we feel is important," O'Brien said.
The organization decided to shift fundraising models in 2014, and now runs its own fundraising phone campaigns.
Now, the group has more direct control over the fundraising operation, O'Brien said.
There are significant costs involved with running the fundraising operation directly, he said, but under the new model, "We're still making a little bit more than we were in the past."
The Attorney General's Office has been monitoring fundraisers since the mid-1990s. The total amount raised by paid fundraisers has decreased from a high of $3.7 million in 2010 to $2 million in 2015, according to the report.
Sorrell encouraged Vermonters to be wary when they get calls asking for donations. When he charitable solicitors phone him, he always asks whether they are working for a paid fundraiser. Under Vermont law, paid fundraisers are required to disclose that information.
His office has fined two paid fundraising companies for making misleading statements to donors, and other investigations are ongoing. He encourages Vermonters to report complaints about paid fundraisers to his office.
"Support the charitable causes you want to and be aware that you may want to use a different mechanism to make sure that the charity is getting 100 cents of your dollar," Sorrell said.
Instead of giving money to the paid fundraiser solicitor, he said people could reach out to the organization directly.
"Hopefully people will be generous, but give wisely," Sorrell said.
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