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Funds for Oklahoma charities go in part to fundraisers
May 30, 2010 (The Oklahoman - McClatchy-Tribune Information Services via COMTEX) --
If you gave money to a telemarketer working for an Oklahoma charity, chances are less than 25 cents of every dollar donated went for the cause, an investigation by The Oklahoman has found.
Contracts mostly call for professional telemarketers to pocket more than 75 percent of the donations they solicit for Oklahoma charities, according to information on file with the Oklahoma secretary of state and Internal Revenue Service.
A few of the telemarketers keep as much as 90 percent of the funds they collect, according to records filed in 2009 and 2010.
"It seems so shocking, doesn't it, but that is not unusual," said Laurie Styron, an analyst with the American Institute of Philanthropy. "In the case of these professional fundraisers, if you were to just tell a donor ... people would refuse to give. They'd hang up on you."
Several charities in Oklahoma make tens of thousands of dollars with little or no help from telemarketers. They use volunteers, e-mail, direct mail and other ways to further their causes.
But officials with state-based charities contracting with telemarketers say it's worth it because the solicitors pay the costs for call centers and employees.
"It's one of those necessary evils," said Bill Kokendoffer, president of the Mid-America Chapter of Paralyzed Veterans of America, based in Oklahoma City. The group's contract calls for the telemarketer to retain 88 percent of the charity's donations.
"I don't like telemarketers. I don't like them calling me, but it's a way for us to generate needed funds," he said. "If we tried to do it in-house, our administrative costs would go through the roof, plus us having the headaches of managing a phone room."
The state charities contracting with telemarketers include groups representing veterans, law enforcement officers, firefighters, students and disabled athletes.
A need to diversify
In many cases telemarketing charities largely ignored other types of fundraising, such as direct mail, Internet campaigns and special events.
"If it's their main fundraising vehicle, then they're going to have high fundraising cost," said Bennett Weiner, chief operating officer of the Better Business Bureau Wise Giving Alliance. "When the facts are revealed to the public, donors feel let down, and they assumed that much more was going to the charity."
Weiner said some telemarketing is viable.
Styron said Doctors Without Borders is an example.
"You have certain groups like that, that on the whole they're operating very efficiently and they'll just use the professional fundraisers in a very targeted way to develop their membership," she said. "All organizations do need to spend some money doing that."
Telemarketing is the largest and -- most often -- only expense for state-based charities.
Styron and Weiner said their organizations recommend charities should spend no more than 35 percent of contributions on fundraising.
Of the charities using telemarketers examined by The Oklahoman, only the Mid-America Chapter of Paralyzed Veterans of America and Special Olympics Oklahoma met the standard, largely because the charities don't rely solely on telemarketing.
The veterans group gets the majority of its money from the national Paralyzed Veterans of America organization, which uses a mail campaign, Kokendoffer said.
Special Olympics Oklahoma used a variety of methods, including mail and special events.
"We try to do a little bit of everything just so we're not reliant on one specific aspect of fundraising," Special Olympics Oklahoma Development Director Derek Cain said. "With telemarketing, it has become more expensive over the years, and we've made a point to decrease our reliability on that."
Oklahoma charities using telemarketing collectively spent 54 percent of contributions on all fundraising methods.
The average is significantly lowered because the largest donor recipient, Special Olympics Oklahoma, spends about 16 percent on soliciting funds. If Special Olympics Oklahoma is not included, the remaining Oklahoma charities spend 74 percent of contributions on fundraising.
Defense of practice
Using different forms of fundraising sounds good in theory, but just doesn't work out in practice, said representatives from Oklahoma charities.
Henry Hall, executive director of Oklahoma American Veterans News, said his organization tried a direct mail campaign over the holidays last year, and the results were abysmal.
About Christmas, the veterans group sent out about 6,000 pieces of mail and got back less than 100, Hall said.
"In the letter we told people we were switching from telemarketing to mail," he said. "It didn't seem to make a difference."
A few of the charities said they have received a minimum payment guarantee from a telemarketer.
The Oklahoma Association of Chiefs of Police has a guarantee of $36,000 a year from a telemarketer and gets more if the phone solicitor raises more than a certain amount. The Vietnam Veterans Charitable Foundation has a contract to get 10 percent, or $833.33 a month.
That guarantee is important during hard economic times, said John T. Halbrook, vice president of the Oklahoma Vietnam Veterans Charitable Foundation.
"The past two years has been lousy," he said. "What they're giving us is $10,000 we'd never have. It's a gift, and it allows us to operate within a budgetary amount."
Without the telemarketing campaigns, many charity representatives said they would suffer.
"We would love to get away from that as everybody else would," said Stacey Puckett, the executive director of the Oklahoma Association of Chiefs of Police and the Oklahoma Police Chiefs Training Foundation. "If we didn't have that money for operational support we couldn't do things. It would have a huge impact on our abilities to provide resources and support to the communities and law enforcement."
Ask questions
Styron said many telemarketing campaigns rely on donors not knowing who is calling, where they are calling from and how much of the donors' money is going to the telemarketing companies.
Information published by the Oklahoma attorney general's office encourages people to ask if they're talking to a volunteer or professional fundraiser and how much of the donation goes to the charity.
Puckett said her organizations want to make sure there is no deception and have control of the telemarketing script and can listen to tapes of conversations. At least twice she has called the telemarketing company and taken care of problems.
"We try to be very open and let everybody know what we are doing."
To see more of The Oklahoman, or to subscribe to the newspaper, go to
http://www.newsok.com. Copyright (c) 2010, The Oklahoman, Oklahoma City
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