Based in St. Louis, and with contracts with Disabled Firefighters Fund, the Coalition of Police and Sheriffs, [...]]]> The St. Louis Post-Dispatch reported last Sunday on the work of Jason Birrittier — charity telemarketing entrepreneur. Jason recently shut down his telemarketing operation (called Public Safety), after a run-in with law enforcement. He denied all allegations.

Based in St. Louis, and with contracts with Disabled Firefighters Fund, the Coalition of Police and Sheriffs, and the American Veterans Relief Foundation, Public Safety kept more than 80 percent of the money it raised. Note: each of those three “badge” organizations had previously earned our Charity Skunk award.

Read the St. Louis Post-Dispatch story.

Comments in the article from Mr. Birrittier provide fascinating insight into his thinking (and perhaps that of similar charity telemarketers). According to the Post-Dispatch:

• “I felt by what I was doing, I was still helping out,” Birrittier said.
• Birrittier said he enjoyed talking to donors. If any of them asked how much of their donation would stay with Public Safety, he said, he would offer the truth — 82 or 85 percent, depending on the charity.  “People would still give after telling them that,” he said, “believe it or not.”

Apparently his thinking was — “If people are willing to donate when more than 80% won’t go to the charity, why shouldn’t I give them the opportunity?”

Mr. Birrittier reminds us why we avoid charities that use paid telemarketers.

Read the story.

Read our Red Light warning on charity [...]]]> The Orange County Register published a terrific reminder about the dangers of “charities” seeking donations through paid telemarketers. Charity scams and telemarketing frequently go hand-in-hand. I don’t give to “charity” telemarketing appeals by paid marketing groups — and encourage you to follow my lead.

Read the story.

Read our Red Light warning on charity telemarketers.

Every dollar scam “charities” take in is a dollar that could instead have gone to a strong charity doing valuable work with the funds entrusted to it.

Join our Serious Givers email group now and we’ll send you our Top Tips for Avoiding [...]]]> Avoiding “charity” scammers is an important part of smart giving.

Every dollar scam “charities” take in is a dollar that could instead have gone to a strong charity doing valuable work with the funds entrusted to it.

Join our Serious Givers email group now and we’ll send you our Top Tips for Avoiding “Charity” Scammers — a handy list of things to check, watch for and avoid.

The connection between sleazy “charities” and paid telemarketing can’t be denied — they frequently travel together. Just take a look at the results so far from Operation [...]]]> Every dollar sleazy “charities” take in is a dollar that could instead have gone to a strong charity doing valuable work with the funds entrusted to it.

The connection between sleazy “charities” and paid telemarketing can’t be denied — they frequently travel together. Just take a look at the results so far from Operation False Charity headed by the Federal Trade Commission, including the lawsuits filed by the CA Attorney General’s Office.

Comment: Charities exist to do the work of their missions and causes. When they raise money from donors, donors have the right to expect that a high percentage of donated funds will go to the work. Donors should also expect that the charity will incur reasonable administrative costs to manage its operations, and reasonable fundraising costs to support its work.

People can debate what should be the minimum percentage of a charity’s expenditures that go to its mission or cause (i.e., programs) as opposed to administration and fundraising. But I can’t imagine that anyone would argue that 50% or less is a suitable level of spending on mission or cause.

Sleazy charities: Look at the three Santa Ana “charities” we recently named Charity Skunks – and you’ll see that on average a piddly 5.3% of their expenditures went to their purported missions. If only 5.3% of your spending goes to your mission, you’re at least sleazy, and you’re probably not a charity by most definitions.

Paid telemarketing: Our recent sampling of results from a telemarketing firm used by all three Santa Ana “charities” showed that (on average) of every dollar the telemarketer raised from donors, less than 15 cents went to the charity client. Counsel defended the small portion going to charity by saying the telemarketers “didn’t pay more to charities because they incurred high costs.”

The three Santa Ana sleazy charities referenced above were big users of paid telemarketing contractors. Sleazy charities and paid telemarketing together — is this a coincidence?

There are plenty of strong charities out there to support, that don’t use paid telemarketers.

For those charities that do use paid telemarketers, I’m adopting a “rebuttable presumption” approach against donating:

• I presume a charity that uses paid telemarketers is unworthy of my confidence or support (that is, they don’t get a penny from me),
• unless and until the charity rebuts the presumption by providing to me solid evidence (through its Form 990 and otherwise) that it is worthy, that its use of paid telemarketers is cost-effective and suitable in its overall operations, and that it appropriately uses the moneys entrusted to it.

Feel free to join me in this.

Note: Well-managed charities can and do make cost-effective use of their board members and other volunteers in calling donors — that’s quite different from paid telemarketing.

Based on the California action, each of the following has earned our Charity [...]]]> California’s Office of the Attorney General on May 29 announced lawsuits against 53 individuals, 17 telemarketers and 12 “charities” who purported to be helping police, firefighters and veterans. The California action is part of the Federal Trade Commission’s Operation False Charity.

Based on the California action, each of the following has earned our Charity Skunk Award:

• Law Enforcement Apprenticeship Program, and its directors and fundraiser (Rembret, Inc.)
• California Police Youth Charities, and its executive director and fundraisers (National Consultants, Inc. and Public Appeals, Inc.)
• American Association of Police Officers, Police Protective Fund, Inc. and Junior Police Academy (operated by the same group), their officers and fundraisers (including West Coast Advertising, aka Professional Communications Network, and Mark Christiansen, dba Charitable Fundraising Services).
• Association for Firefighters and Paramedics, its president and its fundraisers (Public Awareness LLC, Community Support, Inc. and Courtesy Call, Inc.)
• Association for Police and Sheriffs, Inc., its directors and fundraisers (Public Awareness LLC, and Courtesy Call, Inc.)
• Homeless and Disabled Veterans Corporation and its fundraiser (Almost, Inc.)

California also acted against Coalition of Police and Sheriffs, Disabled Firefighters Fund and American Veterans Relief Foundation — earlier recipients of Charity Skunk Awards.

The complaints overflow with allegations like: fraud, false promises, misuse of donated funds, unfair business prectices, filing false public documents, failure to keep records, deceptive and misleading solicitations, improperly compensating directors and officers, and deceptive and abusive telemarketing practices.

Tips offered to potential donors by the California Attorney General’s Office:

• If you receive an unsolicited call asking for a donation, it is most likely from a paid telemarketer who may keep a substantial part of your donation as payment of fundraising fees.
• Recognize that the words ‘veterans’ or ‘military families’ in an organization’s name don’t necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.
• Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.
• If you have any doubt about whether you have made a pledge or a contribution, check your records. If you don’t remember making the donation or pledge, resist the pressure to give.
• Check out an organization before donating. Some phony charities use names, seals and logos that look or sound like those of respected, well-established organizations.
• Ask the soliciting charity or the paid fundraiser what percentage of your donation will go towards fundraising expenses and what percentage will go towards the charity’s charitable purpose.
• Do not send or give cash donations. For security and tax record purposes, it is best to pay by check made payable to the charity.
• Ask for a receipt showing the amount of your contribution.
• Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win a sweepstakes.

First, do you have enough information about the charity? Do you have their latest IRS Form [...]]]> So, without that telephone call from that pleasant young man, you never would have known about the great work his charity is doing. He did you a favor, and you’d like to make a donation. Don’t do it!

First, do you have enough information about the charity? Do you have their latest IRS Form 990? I bet they didn’t send it to you.

Second, and the capper for me. Paid telemarketing is a horribly expensive way to raise money. Our recent sampling of reports filed with the CA Registry of Charitable Trusts showed that the telemarketer paid less than 15% of what was raised to the sponsoring charities — so at least 85 cents of every dollar donated went to fundraising costs! Not much support for that great work the young man told you about.

More information on our Red Light warning system.

alleging that all three organizations, based at the same address [...]]]> The Federal Trade Commission (FTC) announced on May 20 Federal court cases and proposed settlement orders involving

• American Veterans Relief Fund (AVRF),
• Coalition of Police and Sheriffs, Inc. (COPS),
• Disabled Firefighters Fund (DFF) and
• Individual defendants Jeffrey Dean Duncan, William Rose and Kathy Clinkenbeard,

alleging that all three organizations, based at the same address in Santa Ana, CA, were created almost entirely to provide profits for the individual defendants and the for-profit fundraisers they hire. In recognition of their work, we’ve awarded the organizations and individual defendants our not-so-coveted Charity Skunk Award.

The FTC alleges, for example, that telemarketers calling on behalf of AVRF falsely claimed that the money they were raising would support families of soldiers fighting overseas — when virtually no money went to such families; COPS misrepresented its affiliation with law enforcement; and each organization misrepresented that donations would go to a legitimate charity, that they had programs (which did not exist), and that the programs would benefit the local community of the donor.

According to a related Los Angeles Times report, the groups raised $19 million from 2005 to 2008 but turned over only 5% of the money to legitimate charities. The report quotes counsel to the defendants, who said “the groups didn’t pay more to charities because they [the groups] incurred high costs.”

There’s more interesting information to be gleaned from the most recent tax returns (Form 990) of the three organizations,

• In 2007, together they raised more than $4 million. In 2004 through 2007, together they raised more than $18 million.
• In 2007, together they averaged spending a miniscule 5.3% on programs (the leader being AVRF, which spent a whopping 7.3%).
• In 2007, 65% of their spending went to ten outside telemarketing firms – and one firm was common to all three organizations.

If you take a look at the filings by that common firm with the CA Registry of Charitable Trusts, you’ll see that:

• The firm reported that they raised a bit over $2 million for charities, and that only about $300,000 (or 14.5%) of that went to charities. Guess that’s some of what counsel (see above) was talking about.
• COPS, DFF and AVRF aren’t the only groups the firm has worked for here in California.

Kind of makes us wonder whether the FTC has found a whole den of skunks — we hope they’ll keep digging, regardless of the smell!

The FTC website has several helpful documents on avoiding charity fraud. Start with this one. See also our links in the right column.