Oregon for-profit fundraisers pocketing bulk of charity donations

Charities may only get a fraction of your money if you donate through third-party fundraisers.   

Investigation: Where does your donation go?

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Retiree Cheryl Ennis lives on a tight budget in McMinnville. But when a man called her in September and asked for a donation to the Oregon State Police Officers Association, she couldn’t say no. 

“I thought that sounded like a good deal,” said Ennis.

She agreed to donate $10. A few days later, an invoice arrived in the mail. 

Ennis said it looked suspicious. The envelope was hand-stamped and self-addressed to a post office box in Beaverton.

“The state police is in Salem,” she said. “I thought, ‘I wonder if I’m being scammed?’”

 

 

A KGW investigation found the invoice was actually headed to a for-profit company called Community Fundraisers. The professional fundraising firm was hired to fundraise for the police association, but the contract shows that only a quarter out of every dollar goes to police. Community Fundraisers keeps the rest.

Ennis decided not to contribute.

“I don’t mind giving money but I’d really like it to go where I intend it to go,” she said.

A KGW analysis of state records showed that over the past two years, Beaverton-based Community Fundraisers brought in $1.1 million in contributions for various charities and police associations. Of that money, records show only 28 percent went to nonprofits.

 

 

The Oregon State Police Officers Association said Community Fundraisers helps them raise money, something they don’t have the capacity to do.

“From my personal experience, I would be shocked if Community Fundraisers was profiting greatly from their business model, and I know that the funds that they raise for us are used for great projects and are very appreciated by myself and our members,” said Darrin Phillips, president of OSPOA.

Professional fundraising is legal and there are no restrictions on how much solicitors can keep. But the watchdog group CharityWatch recommends that if you do contribute to a professional fundraiser, at least 65 percent of all donations should go to charity.  

“Really, the majority of your dollar should be going to the actual cause,” said Michelle Shaffer of the Better Business Bureau of Oregon.

For-profit companies soliciting charity donations in Oregon must register with the state attorney general’s office, however, they don’t have to tell donors how much of the money raised will go to the non-profit. 

“I don’t think too many donors would be happy if the charity said to them, ‘You can give $100 and we’re only going to get $25 or $30 from that,’” said CharityWatch president Daniel Borochoff. “They’d tell the fundraiser to get lost.”

Operator scripts and invoices from Community Fundraisers do not mention what percentage the solicitor will take. Organization staff said if someone inquires, telemarketers will disclose how much money is going to the charity.

“Not many people ask for the percentage,” said Rosa Mus­ick, owner of Community Fundraisers.

Fundraising companies say soliciting donations is expensive. Community Fundraisers has its own office and a handful of staff, calling homes and businesses from a call center in Beaverton.

“I have to pay the overhead, pay the bills, pay payroll. Everything costs,” said Musick.

In 2015, state records show Community Fundraisers spent $79,495 on rent, $10,744 on security and $17,103 on telephone service. Musick said the company provides a vital service for organizations.

“They don’t have the time or the skills to do fundraising. They are police. They are firefighters,” said Musick.

State records indicate Community Fundraisers solicits exclusively on behalf of police unions and officer associations. The firm’s clients include the Oregon Peace Officers Association, Crime Stoppers of Oregon, Professional Firefighters of Clackamas County, Oregon Narcotics Enforcement Association and Washington County Police Officers Association.

“They have been a huge asset to us,” said Rick Puente, president of the Oregon Peace Officers Association. 

Over the past two years, Community Fundraisers brought in $243,509 on behalf of the organization. Of that, $73,050, or 30 percent, went to the nonprofit.

“It is an added avenue not just to raise money but it is a way of marketing and getting our organization out there,” said Puente.

Critics say companies such as Community Fundraisers pick causes such as police, veterans and disabled children because they generate a lot of support.

“How do you say no to children?” asked Shaffer from BBB. “It is almost like a no-brainer.”

Oregon-based Jadnet has collected $270,616 in donations on behalf of Kids Wish Network, a nonprofit for dying children and their families. Of that, $32,473, or 12 percent, went to the Florida-based charity.

 

 

In 2014, Kids Wish Network was named “America’s Worst Charity,” according to a report by the Tampa Bay Times and Center for Investigative Reporting.

State records show Jadnet also raised funds on behalf of Find the Children, American Association of State Troopers, Multiple Sclerosis Foundation and Oregon Association of Chiefs of Police.

Over the past two years, Jadnet has collected $3.2 million dollars. Of that, 26 percent went to the charities. 

The president of Jadnet, Dennis O’Shea, did not respond to repeated phone calls at the company’s Keizer offices.

Consumer advocates say donors can always make a contribution directly to a nonprofit. 

How to make sure you’re giving the most to charity

  • Donate directly to the charity
  • Ask the charity how much goes to programs. Generally, experts say charities should spend at least 65 percent of funds directly on the cause they support.
  • If you donate through an outside fundraiser, ask how much goes to the charity itself. CharityWatch recommends at least 65 percent of funds go to the charity.
  • Check if the charity is registered with the Oregon Department of Justice here.

More: Tips for giving from the DOJ

Published October 27, 2016

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