When Charity Calls, Check the Pitch Price
THE phone rings. ``Hi, Mr.----- ,'' says a bright young voice, ``my name is David. How are you this evening?'' Recognize the pitch? You're about to be sold something. Chances are it's something you don't want. But it just may be an appeal from a charity, soliciting for its fund drive. You like the idea, so you pledge $10. You assume that your whole $10 will go to the charity itself, right?
Wrong. Chances are you've just given $2.50 to charity - and $7.50 to a commercial telephone soliciting company hired to raise money. That's the finding of a report published a month ago by the Connecticut Department of Consumer Protection and the Office of the Attorney General. The report, one of the first of its kind in the nation, is probably fairly representative of conditions across the country. It finds that:
Connecticut citizens gave almost $9 million to paid telephone solicitors, calling from 157 charitable, civic, police, and firefighter organizations in 1988.
Only $2.3 million - 25.6 percent - went to the organizations themselves.
In only 3 of 191 campaigns did the not-for-profit receive at least half the amount collected. In some cases it received nothing.
``There oughtta be a law!'' you say? Well, yes and no. In 1980, the Supreme Court struck down an ordinance in Schaumburg, Ill., that required charities using on-the-street or door-to-door solicitors to commit at least 75 percent of collections to ``charitable purposes.'' And last summer, in the so-called Riley decision, the Supreme Court prohibited a North Carolina law from limiting a charity's fund-raising expenses. It also struck down a law requiring a solicitor to disclose the percentage of funds actually going to the charity.
Bad decisions? Not really. They protect organizations that combine fund-raising with advocacy - often the case when a small group uses its solicitors to spread the word about its goals. The court decisions also aid fledgling groups that espouse unpopular causes and have difficulty raising money.
And that, after all, goes to the heart of the not-for-profit sector in America. Causes not yet familiar, and therefore unpopular, often get their start through grass-roots advocacy. How easy would it have been to raise money for civil rights in the 1950s, antismoking campaigns in the 1960s, or greenhouse-effect research in the 1970s?
But a balance is needed. Granted, a soliciting firm needs to rent phones, hire solicitors (often low-paid students), and collect the funds. But does that really mean, for example, that when the Connecticut Association for Retarded Citizens hired a Florida-based telephone firm for a campaign, it should have received nothing - zero percent - of that firm's take? Should the Montville Fire Company No. 1 have gotten only 5.4 percent, or the Kiwanis Club of Newton only 5.8 percent, or Big Brothers-Big Sisters of Central Connecticut only 9.7 percent?
It doesn't sound right. But it's perfectly legal. The soliciting firm and the not-for-profit have contracts spelling out percentages - with the latter sometimes feeling that even 5 percent is better than nothing. But there's a third player here: the giver. That's where the unfairness arises. There's a false pretense in the solicitation when most of the freely given money goes to the commercial firm and only a small fraction to the charity, with the donor never even suspecting.
What's to be done? Two things. First, the publication of reports like the one in Connecticut should be encouraged so the public can find out where its money really goes. Second, the next time you hear the phone-pitch, ask what percentage will go to the charity. Solicitors aren't required to tell you. If they won't, remind them that you're not required to give, either.