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NY state telemarketers keep most funds raised for charity: report

By Chris Francescani

(Reuters) - Telemarketing companies in New York state are paid, on average, more than 61 percent of the money they raise for charity, according to an annual study released on Friday by New York's attorney general.

A total of more than $240 million was raised by telemarketing firms hired by 434 charities in 2011, according to a report released by New York State Attorney General Eric Schneiderman, which is based on 602 professional fundraising reports filed with his office in 2011.

The report found that 82 telemarketers were paid nearly $148 million, or about 61.5 percent of the money raised, while only $93 million or about 38.5 percent of the funds went to charity.

Among the worst cases was the National Audubon Society, aimed at saving wildlife habitats, which received just 2.53 percent of more than $165,000 raised in New York by a fundraising firm, according to the report.

Judicial Watch, which describes itself as "a conservative, non-partisan educational foundation, promotes transparency, accountability and integrity in government, politics and the law," received only $125 of $280,000 pledged, or 0.04 percent.

There were some exceptions, including AmeriCares Foundation, the disaster relief charity, which received nearly 88 percent of $2.1 million raised on its behalf, according to the report. The New York City Ballet received nearly 60 percent of the $609,000 raised by an outside firm, while the New York Botanical Garden received 71 percent of money raised.

Seventy-eight percent of charities that hired professional fundraisers in New York received less than half the money raised. In 76 of the 602 campaigns, the charities lost money.

"To me, it's an outrage," said Naomi Levine, director of New York University's philanthropy and fundraising center, which offers a masters course in professional fundraising.

"The argument from the telemarketing companies is that without them, the charities wouldn't have gotten anything, and the charities say they are not in a position to raise the money by themselves," said Levine. "It's disturbing."

New York's Better Business Bureau recommends that charities pay professional fundraisers no more than 35 percent of money raised.

(Editing by Barbara Goldberg and Phil Berlowitz)

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