How much of charitable donations do telemarketers keep?
Roughly what percentage of charitable donations raised by telemarketing firms in the U.S. actually goes to the designated charity?
A) 90 percent
B) 75 percent
C) 50 percent
D) 20 percent
If you answered A or B, you likely have a good heart -- but may be ripe for the picking.
The answer is C. Only about half the money raised for charities by telemarketers typically makes it to those philanthropic groups, according to a new report.
The analysis released Wednesday by New York Attorney General Eric Schneiderman offers a window into just how much telemarketers can keep of the money they are collecting in the name of charities. Although his office focused on fundraising in New York, the findings generally jibe with what other studies have found: Most charities get less than half of what telemarketing firms raise on their behalf.
Three-quarters of the fundraising efforts addressed in the report resulted in charities getting less than half of what had been donated. About half the time, charities took in less than 30 percent of what was raised, the study found.
Telemarketing firms also use questionable practices when raising money. Schneiderman found that telemarketers promoted a variety of sound-alike organizations intended to take advantage of consumer familiarity with established groups. An example cited by the Attorney General's office was Kids Wish Network -- similar to the Make-a-Wish Foundation -- which paid out more than 66 percent of telemarketing revenues to for-profit fundraisers.
Here are some tips from Schneiderman to help avoid being taken advantage of the next time a telemarketer calls to raise money for a "good cause."
- Resist pressure to give on the spot. Instead, ask if the representative can send you more information.
- Ask how your donation will be used. Beware vague replies and any unwillingness to send you details about how the group spends donations.
- Look up charities. Check a group out before making a donation. Plenty of sites evaluate and review charities, such as CharityNavigator.org, Guidestar.org and Give.org.
- Give to established charities. Stick with charities you're familiar with.
- Never give cash. Skip telemarketing sales appeals entirely and send a check to the organization of your choice in your own time.