October 23, 2012

What do the American Diabetes Association, the American Cancer Society, and the Montreal SPCA, have in common? They are nonprofits with some donors who feel fooled and deceived.

Bloomberg Markets Magazine, CNN’s Anderson Cooper 360 and Health Care Renewal (hcrenewal.blogspot.com) are just a few of the media outlets reporting recently on charity-hired telemarketers who are not being forthright with contributors. These reporters have uncovered information suggesting that callers have knowingly misled potential donors and  volunteers when trying to engage them in neighbor-to-neighbor campaigns.

In one example, Bloomberg’s Charities Deceive Donors Unaware Money Goes to a Telemarketer.” (by David Evans, Sept 2012), provides a recorded example from the Ohio Attorney General’s Office of how InfoCision, a large privately owned telemarketer, engages a call prospect. Here is an excerpt:

“Hi, Mr. Kolb?” the caller said. “My name is Stephanie. I’m calling from InfoCision for Ohio division of American Cancer Society.” 

Kolb: “Yeah. Now, how much of the donation goes to the American Cancer Society?”

Stephanie: “Seventy-eight cents of every dollar.”

Kolb: “Does the money go to you guys and then to the American Cancer Society?” 

Stephanie: “No, we only get, like, 22 cents of the dollar. We don’t get that much.”

Bloomberg.com continues, “As it turns out the society got less than half of the money raised in that campaign, according to its filings with the IRS and North Carolina. In addition to giving false information about how the donations would be used the solicitor unknowingly made another mistake. Kolb is an investigator for the Ohio Attorney General’s Office.”

Other reports and lawsuits expose situations where much less money or, in some cases, none of the contributions made it to the represented charity, as seen in the chart to the left. Of course, it is not unusual for nonprofit organizations to launch “loss leader” campaigns to raise their awareness or to identify future donors for additional solicitations that ultimately bring more dollars to the charity. Yet, of additional concern to donors is that reports referencing lawsuits involving these alleged misleading solicitations typically note that the involved charity has approved these telemarketing scripts.


America is known as the most giving country in the world. This generosity is built on the public trust that money raised will go to organizations that do their very best to help our neighbors in need. Our required rules of transparency for nonprofit reporting are the infrastructure for this trust.

Volunteers and donors are the lifeblood of many of these charities. Why would nonprofits risk partnering with organizations that knowingly mislead their most important constituencies? Do the charities think donors don’t want to be bothered or won’t understand a more complex and lengthy explanation of their funding strategy? If donors heard the real deal from these solicitors would they give less? Does the end actually justify the means in these cases?