You have probably given a donation to more charities that use commercial fundraising companies than you think.
Most of the time you have no idea that a for-profit fundraising company is being used by a well-known charity. Almost all big charities do use these companies at some time. Charities depend on quantity to overcome the costs. A commercial company might be behind the phone solicitation you receive; the direct mail package that arrives in your mail box; and the call center you ring up after seeing a fundraising appeal on television.
The Los Angeles Times recently provided a database on its site where you can check up on the efficiency of nonprofits that use commercial fundraising companies. According to the Times, commercial fundraisers, on average, deliver just 46 cents of each donated dollar to the charity.
Some charities do better than others. Some receive 70% or 80% of each dollar raised. But many fall into the dismal category, receiving as little as 33% of each dollar raised. That doesn't mean that you have to avoid all charities that use professional fundraising companies. That would be impossible to do. But you should investigate the fundraising efficiency of the charities to which you contribute.
How can you make sure that most of your charitable donation is going to your chosen charity? In an age of global fundraising, and an increasing deluge of fundraising appeals, it is not easy to make sure that most of the money you donate goes to the cause you want to support. But if you want to be sure that most of your donation is actually getting to a charity, follow these tips:
- Give locally and to only 501(c)(3) charities. The charity down the block and that you know well probably is raising its own funds. Give to your local PBS station, your PTA, the local symphony, the local food bank. See if there is a community foundation in your area.
- Give directly. Send a check directly to your favorite charity or drop it by the charity's office. Go to the charity's website and donate using its own credit card system. Purchase its tickets, attend its special events, and, especially if you are giving a large amount, ask to visit with the fundraising officer directly.
- Use charity rating organizations to check out the fundraising efficiency of charities. Go to CharityNavigator or the Better Business Bureau site and look up the charity you're considering. If its fundraising efficiency is high, consider donating. You won't know if a commercial fundraiser is being used, but it's the efficiency that matters.
- When giving online, read the information provided. Whether it is FaceBook, NetworkforGood, or any one of the many charitable giving portals, check out what fees are being charged, to whom, and for what.
- Educate yourself about charitable giving. Read articles about philanthropy and charities in your favorite publications, browse the articles at the rating sites, engage in conversations with friends about charitable giving, and share information. You would probably not buy a car, pick a gym, or choose a daycare without doing your research. Charitable giving deserves the same amount of care and attention.