Why You May Not Want to Give Over the Phone

In my post titled Off My Giving List, I noted that I don't give to any charity over the phone. But after reading a comment from a reader, I'm wondering if anyone should ever give via phone solicitation. Consider this:

I used to work as a telemarketer for non-profits. We were sub-contractors and the MOST we gave any of our charities was 20%. That's correct. My sub-contracted professional telemarketing company kept 80% of the proceeds, and the charity received 20%. That was the high-end. Several other charities only received 15% or 12.5%. ALWAYS, ALWAYS, ALWAYS ask the specific percentage of money that goes to the charity. Telemarketers are required to answer this question honestly. They will attempt to snow you the first time you ask, but ask again and they will eventually answer.

We were taught to keep pushing to get the sale, asking for lower and lower amounts until we couldn't even get a $5 donation. We were taught to do this regardless of what the person on the other end said. My advice would be to NEVER give to a phone solicitation. The overhead is unbelievable. You are mostly going to pay for high-school or college aged kids to call people up and pester them.

When someone calls soliciting, just hang up. Don't say anything. Just hang up.

Wow. Really. Wow.

80% (or more!) of the donation goes to the telemarketer? Is this for real? Even if it's "only" 50% (or 25% for that matter), do you really want such a huge portion of your contribution going to fundraising fees? I know I don't.

Comments

[rq]

"Is this for real?"
Yup.
From the Sacramento Bee:
More than a third of California charity telemarketing campaigns sent less than 20 cents on the dollar to the charities during 2007, the most recent year on record. Those campaigns and a smaller number of charity auctions and concerts raised $93 million for commercial fundraisers, and just $3 million for the charities.
http://www.sacbee.com/capitolandcalifornia/story/1643082.html

There have been lawsuits over this practice: the US Supreme Court ruled that it's legal as long as the telemarketers don't lie about what percentage of the proceeds they keep.

[Eugene Krabs]

I used to get solicitations for a local charity that is the Police ball. I was OK with that, and they were never pushy.

That said, I too am shocked that there are such sales organizations out there that keep this much to themselves!

I never pick up the phone anyway, unless it's a number I recognize. And actually, I don't even have a land line anymore (just a cellphone) so this is no longer even an issue.

[guinness416]

Yeah, all those police-related events and charities are the worst in this regard, in my experience too. "Just hang up" should always be the approach in my opinion if you're not screening calls, although being nice I tend to add a no-thanks in there first too.

[cmadler]

Yes, it's that bad. After I finished my BA, I briefly worked a a door-to-door fundraiser soliciting donations for a nonprofit that's well known locally. We kept a minimum of 50% of everything, including donations mailed in within a month of us coming through.

[suzie]

I would like to ask a question then. What is the best way to donate to a charity then? Many of the ones I receive in the mail also use a company to send out mailings and collect the donations and I am sure the charity gets only a percentage of that. Is online better? I am starting to think there is no way around a solicitor getting a share of what I want the charity to have.

[kitty]

Wow.... I did use to give this way, but then I switch to mostly giving via my employer - they have yearly charitable compaign and I can pay with payroll deductions. I also respond to some mail that corresponds to well known organizations. Now, I am not sure how much goes to companies that send the mail, but with some organizations it's the volunteers who do it, I believe.

I am also considering ignoring organizations that waste money on unsolicited "gifts". Especially stuff like mailing labels, I really hate those. I have more of those than I need and having to tear them all up is annoying. The simpler the request the better.

[Andy McGill]

It is surprising, until you think about it. If the solicitors are paid even minimum wage, and most people hang up, there is not a lot of profit unless far less than half goes to the charity. From the other side, if a solicitor company approaches a charity and says it will raise money for no effort, many charities will sign on.

The best advice is to decide yourself what charities to support, and then turn down all solicitations that come to you uninvited.

[StL Pastor]

Suzie-
two thoughts:
1) mail checks directly to the charity in question. Giving before being solicited is the best for everyone.
2) Use a service like charity navigator http://www.charitynavigator.org/ to evaluate charities you are interested in, so you have a better sense of where your money is going.

Blessings on your generosity.

[Edmund]

When I was in college, I was taught not to ever give money via solicitations. I was told I would be supporting "institutional begging".

Always donate directly.

[Patty]

@stl Paston - good notes,

You may also wish to go to GuideStar.org to obtain information about the chairty of interest. This is the site that contains all the Form 990s of Charitable organization (from the IRS filings) Interesting information can be obtained, especially how much the organization pays for fundraising.

I generally will not support the "buying of stuff" (ok maybe a few GS cookies), after the organization pays for the 'stuff' there isn't much left over. Same with using and paid 3rd-party fundraiser, there isn't much left for the organization to meet its mission.

Send the check directly!

And from yours truly that fundraises (as a volunteer) for my public library, thank you for your support of organizations!

[MC]

Anyone want to comment on this re PTA school fundraisers?

My kids' elementary school runs twice yearly "fundraisers" that are really advertised hard by the school, with kids strong-armed to participate by offers of "prizes" and competitions over who can sell the most. The stuff they sell is incredibly overpriced, and it's junk.

People buy "to support the school". I've always wondered how much actually goes to the school.

[MattJ]

I knew a guy in college who was management at a telemarketer that mostly raised money for law enforcement charitable organizations, and his description of the business jibes with what your commenter wrote.

That said, I'm going to disagree with his advice. These shady companies make more money the quicker they hang up on someone who is not paying, and move on to someone who will. So keep them on the phone as long as you can. Wasting their time is wasting their money, and if every person who just hangs up instead took 10 minutes of their time instead, their businesss model would break down.

Don't 'just hang up'. Act inquisitive and interested. Drag out the conversation as long as you can. Set down the phone and spend a couple of minutes looking for your credit card. Have trouble providing them with the (fake) CC number. Tell them how much you appreciate everything they're doing for [the charity they claim to represent], etc. Solicitation calls don't have to be annoying when they're on your own terms. Or if that's not your thing, then just hang up.

Finally, find a legit charity and give generously and directly.