Ahead of Giving Tuesday, Report Lays Out Tips to Protect Donors’ Wallets from Sham Charities
In time for Giving Tuesday and the holiday season, New York Attorney General Letitia James today released her annual “Pennies for Charity: Fundraising by Professional Fundraisers” report, which found that charities that retained professional fundraisers received about two-thirds of every dollar donated in 2020. Professional fundraisers retained the remainder — earning more than $380 million. Analyzing 718 campaigns conducted by professional fundraisers in 2020, the report concludes that charities earned 73 percent of donations from those campaigns, a small increase from the previous year and in line with the last four years’ results.
“As New Yorkers get ready to give to their favorite charities tomorrow on Giving Tuesday, they deserve to know where their money is going,” said Attorney General James. “My duty is to protect New Yorkers’ wallets and ensure that what they donate reaches the charity of their choice. My office will continue to crack down on misleading fundraising practices, so New Yorkers don’t have to worry the next time they give generously to a cause they support. With the holiday season upon us, I encourage all New Yorkers to use our tips as a guide to make informed contributions and ensure that their money is going to a trustworthy source.”
New York is home to a large and diverse number of charitable organizations. As did all sectors of our society, charities faced many challenges during the coronavirus disease 2019 (COVID-19) pandemic. However, despite a significant decrease in in-person fundraising and pandemic-related closures and postponements, charitable giving in response to fundraising campaigns in New York jumped to over $1.4 billion in 2020 — an increase of more than $179 million from 2019 pre-pandemic campaign revenues. Other report findings include:
- In 339 campaigns, or 47 percent of campaigns, charities received less than 50 percent of funds raised, with professional fundraisers retaining the rest.
- In 150 campaigns, or 21 percent of the campaigns, fundraising expenses exceeded revenue, costing charities more than $10 million.
This year’s “Pennies for Charity” aggregates information from reports filed with the Office of the Attorney General’s (OAG) Charities Bureau by professional fundraisers for campaigns conducted on behalf of charities in 2020. Professional fundraisers must register with the OAG and their financial reports must break down the revenue raised, as well as the expenses generated by the campaign. The report and the searchable Pennies for Charity database containing data from those reports is posted on the Charities Bureau website.
This year’s report lays out tips for donors to follow before donating over the phone, through the mail, or online to ensure that their contributions reach the causes they intend to support. Important tips to keep in mind include:
- If you’re contacted by a telemarketer, ask questions to make an informed decision: New York law requires telemarketers soliciting for charities to make certain disclosures to potential donors and prohibits them from making false, misleading, or deceptive statements when soliciting contributions. Telemarketers are required to tell potential donors their names, which professional fundraiser employs them, and if the telemarketer is getting paid. Donors may also ask what percentage of their donation will be paid to the fundraiser for fees and expenses.
- If you receive a direct mail charitable appeal, verify the soliciting organization: Does the organization have a name that sounds like a well-known charity? Doublecheck — is it the one you think it is? Does the mailing claim to follow up on a pledge that you do not remember making? Does it clearly describe the programs that the charity plans to fund with your donation?
- If you’re donating online, do your research first: Donating online or via an app is convenient for donors and can be cost effective for a charity. But before hitting “Send,” donors should check whether a campaign is legitimate. Below are steps to take before donating online:
- Some online platforms that host groups and individuals soliciting for causes do not obtain permission from charities, or vet those charities who use their service. Donors should only give to campaigns conducted by people whom they know. Donors also should check what fees they will be charged and make sure that the charity has given its permission for the use of its name or logo. The site or the charity should confirm that the charity has approved the campaign.
- When donating online, make sure the website is secure: The web address should start with “https.” Unless the charity uses a separate payment site, the web address should match that of the organization that will receive the donation.
- Be wary of email solicitations that ask you to click a link or open attachments. These could be phishing scams that try to trick you into giving out your credit card number, Social Security number, or other confidential information.
More information about the OAG’s Charities Bureau and organizations regulated by it may be found online. If you believe an organization is misrepresenting its work or that a scam is taking place, please contact the OAG’s Charities Bureau at Charities.Bureau@ag.ny.gov or (212) 416-8401.