2001 Volunteer Leader Training Guide
Charitable Giving: Who Really Benefits From the Dollars You
Give?
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Introduction
When your phone rings and the caller asks you to make a
contribution to a children’s hospital, shelter for the homeless or some other
type of humanitarian cause, you may find it difficult to say "no." But what if
you were told that only 10 percent of yoýr contribution would end up with the
charity? What if the caller said, "One dollar of your $10.00 contribution will
go to fund cancer research and $9.00 will go to the company I represent." Would
your conscience still bother you if you declined to give?
Arkansans contribute millions of dollars to charities each year.
Unfortunately, only a small percentage of the money is ever used for the purpose
the giver intended. A large part of the money is paid to professional solicitors
. . . organizations in business to raise funds for charitable groups through
large-scale mailings, telephone drives and other types of solicitations.
Few charitable organizations and non-profit groups have the paid
staff, volunteers or time necessary to solicit donations. Therefore, many hire
professional fund raisers to plan, conduct and manage their fund-raising
campaigns. This is not an illegal practice. It can, however, be misleading to
those who give. Many donors are surprised to learn how much of their
contribution goes to the charity and how much remains with the fund raiser.
Only by seeking information about the charities you choose to
support can you be sure how the money you give will be used and who the money
will benefit. This lesson was written to encourage consumers to be informed
donors and to provide information about charitable giving fraud.
Target Audience - Consumers who may be asked to make
donations to charitable organizations.
Objectives
This lesson will help participants:
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Understand how charitable dollars are raised and
spent.
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Realize the importance of asking questions
before contributing to a charitable organization.
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To become a savvy donor.
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Learn about resources that provide information
about fund raising practices and charitable fraud prevention.
Teaching Points and Activities
I. Welcome participants to training.
II. Start lesson with this story.
"Two men were leaving church in their underwear. One said to
the other: "That was the best sermon I ever heard on giving."
You might say that these men "gave the shirts right off their
backs." You might also question the sensibility of their gifts.
We all know the importance of giving. Andrew Carnegie once
said, "No man becomes rich unless he enriches others." However, the question
today is "who is really getting rich when we give to humanitarian causes?"
Before giving we must ask "How can we be sure that the money we give is used
for the purpose intended?"
III. Use the INTRODUCTION on page 1 of this training guide to
continue teaching lesson.
IV. Continue lesson being sure the following points are covered.
-
Many charities find it more efficient to pay
professional fund raisers to handle large scale mailings,
telephone drives and other solicitations rather than their own
paid staff or volunteers. Professional fund raisers are in
business to make money and can legally keep a portion of the
money they collect. Donors may be surprised when they learn how
much of their contribution goes to the charity and how much
remains with the fund raiser.
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Arkansans contribute millions of dollars each
year to charities and various humanitarian projects. Those who
give deserve to know how their contribution will be spent. Often
a charity describes the purpose of their solicitation in general
terms such as "for the prevention of cancer" or "to feed the
homeless." These broad statements lead donors to believe that
all of their contribution will be used for the stated purpose.
This is not always the case.
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Arkansas law requires charitable organizations,
unless exempt, to register with the Attorney General’s office
prior to soliciting contributions in the state. Exempt
organizations include educational institutions, religious
organizations, political candidates and organizations,
governmental organizations, non-profit hospitals and any
charitable organization that does not intend to solicit and
receive contributions of more than $25,000. Charities
registering with the AG’s office are required to provide
financial records of any charitable solicitation conducted in
the state.
-
The Arkansas Attorney General’s office has
published a report containing information about 996 fund raising
campaigns conducted by paid fund raisers on behalf of charitable
organizations between 1997-2000. The report notes that of the
996 campaigns reviewed, only 31 percent of the charities
received over 50 percent of the gross revenues collected.
Eighteen percent of the charities received between 31 and 50
percent; 11 percent received between 21 and 30 percent; 12
percent received between 11 and 20 percent; and 28 percent
received 10 percent or less of the gross revenues collected.
More than half (51%) of the charitable solicitations conducted
by paid fund raisers between 1997-2000 returned 30% or less of
the money collected to the charities they represented.
V. Distribute Participant Resource 1, "Charitable Contributions:
Who Gets Your Money?" Review with participants. Explain that the list contains
examples from the Attorney General’s survey of 1997-2000 fund-raising campaigns.
VI. Distribute Participant Resource 2, "Before You Make a
Charitable Contribution." Review with participants.
VII. Summarize the lesson as follows:
The next time your phone rings and someone you do not know
requests a donation for a seemingly legitimate cause, ask a few questions
yourself. Inquire if the caller is directly associated with the charity or
is calling on behalf of a paid fund raiser. If a paid solicitor, ask how
much of the contribution will actually be used for charitable purposes.
Request the charity’s address and phone number as well as written materials
to learn more about how your donation will be used. Above all, ask if the
fund raiser is registered with the Attorney General’s office, then verify
the answer by calling the Consumer Protection Division at 1-800-482-8982.
Legitimate charities welcome your questions and generally do their best to
provide you with accurate answers. Not every fund raising drive involves a
paid solicitor. Colleges, universities, youth groups, hospitals, etc., may
use their own employees, students or volunteers to raise money. Also keep in
mind that if a charity is not registered with the Attorney General’s office,
they may be exempt from having to register.
It may be best to simply decline all pitches for charitable
donations. If you want to support an organization, contact them directly and
ask how you can help.
VIII. To evaluate the lesson, distribute note cards and ask
participants to write down two things they plan to do the next time they are
asked to make a charitable contribution.
References
Lynn R. Russell, Family Resource Management Specialist
Section Leader - Family and Youth
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