A report released by Attorney General Bill Sorrell shows that paid fundraisers kept more than two-thirds of over $6 million donated by Vermonters to charities using such fundraisers, from July 2010 to 2012.
The large majority of the nonprofits that use paid fundraisers to solicit in Vermont are national organizations. Very few local nonprofits are on the attorney general’s list.
Charities that retained fundraisers received an average of less than a third of the total donations.
There’s nothing untoward about paid fundraisers keeping the “lion’s share of charitable donations,” as Sorrell’s office put it. Paid fundraisers often receive no income other than a portion of what they raise.
According to state law, these fundraisers need to inform those they solicit that they’re being paid by a charity for their fundraising, and tell donors how they can learn more about how their donations are split between the fundraiser and the charity.
The report does not include information about fundraising by employees of charities, nor a total amount of philanthropic giving in Vermont over that period, since it focuses only on campaigns managed by external fundraisers.
Vermont charities employing paid fundraisers received a smaller portion of the donations, the report says, compared with what national charities receive when using paid fundraisers. While charities outside of Vermont received about a third of donations using an outside fundraiser, charities based here received only about a quarter on average.
Sorrell said his report doesn’t indicate a serious problem that Vermonters should be wary of coming into the holiday season.
“I think it’s just information for donors to be able to use, to make informed decisions about their charitable contributions,” said Sorrell. “They might want to continue to support a particular charity, even knowing that a minority of the money they’re contributing is going to end up with the charity.”
“Or, some people might prefer to find a way to contribute directly to the charity of their choosing, rather than going through a paid fundraiser. That’s their right also.” Sorrell said he’d seen no indication that paid fundraisers were systematically failing to disclose their roles or information about how donations were split.
“What you don’t want these reports to do is frighten people away from giving. … You still should give, there are still great organizations out there. Just make sure you’re asking questions and looking up information,” said Stuart Comstock-Gay, president of the Vermont Community Foundation
Vermont Community Foundation president Stuart Comstock-Gay said the report doesn’t reveal anything new. The Vermont Community Foundation invests and administers more than 600 charitable funds and is itself a major public charity.
“The takeaway is to remind people that just because somebody’s calling you about something you think is an important cause, it doesn’t mean that the structure of that fundraising is a reasonable structure,” said Comstock-Gay. He added that he personally doesn’t donate via fundraisers he isn’t acquainted with. “Having transparency about these things is critical.”
“I hasten to add that the vast majority of nonprofits are using money very well, very efficiently,” said Comstock-Gay. “Very few Vermont charities use paid fundraisers. Most can’t afford them, more than anything else.”
“The danger of this kind of report is the thought that all nonprofits are doing this; that’s not true,” he added. “What you don’t want these reports to do is frighten people away from giving. … You still should give, there are still great organizations out there. Just make sure you’re asking questions and looking up information. If an organization will not answer your questions, that may be a sign that you will not want to give to them.”
Both Comstock-Gay and Sorrell pointed out some advantages to using paid fundraisers, which include access to those fundraisers’ donor lists, mandated by law, as well as earning donations that staff employees couldn’t have raised otherwise, no matter how small of a slice trickles down to the charity.
