Nearly 30% of charitable donations by New Yorkers end up in the pockets of professional fundraisers to cover the cost of conducting philanthropic campaigns, according to a new report released Friday by State Attorney General Letitia James.
The annual "Pennies for Charity" report, released in advance of Giving Tuesday and at a time when New Yorkers continue to struggle with the economic fallout from the COVID-19 pandemic, found that the amount of money going directly to charity stayed steady after ticking up in recent years.
In 2019, 824 charitable campaigns organized by professional fundraisers in New York raised more than $1.2 billion. The charities netted more than $918 million, or 72% of the proceeds, while professional fundraisers’ fees and expenses totaled $364 million, or 28%, the report showed. In 2018, charities took 73% of the proceeds while the fundraisers kept 27%, the report found.
"Every year, New Yorkers give generously to charity," James said. "Unfortunately, not all the money they donate reaches the charities they intend to help."
While the report cited progress within the charity industry, which employs more than 1.4 million New Yorkers, the AG's office uncovered problems within the state's fundraising infrastructure.
In 31% of the campaigns examined by James' office, less than 50% of the funds went to charity while expenses exceeded revenue in 17% of campaigns, costing charities nearly $17 million.
Many charities use professional for-profit fundraisers as outside contractors to educate donors about their mission and increase returns.
But many fundraisers collect fees so large that charities receive only a small fraction of the total money donated while others partner with sham charities to give potential donors misleading information, the report said.
The study found an uptick in online giving in 2019, while telemarketing — one of the costliest and most fraud-prone mechanisms for charitable fundraising — continued to decline, the report said.
To ensure that donations reach reputable charities that do the most good, the AG's Office recommends familiarizing yourself with the organization and its programs; asking for information in writing before donating and consulting charitiesnys.com to make sure that the organization is registered.
Tips for giving
The New York State Attorney General's Office offers these tips for giving safely to charity:
- Familiarize yourself with the charity and its mission before giving;
- Always ask for information in writing;
- Find out how a charity plans to use your donation, including the programs your contribution will support;
- Consult charitiesnys.com to make sure that the organization is registered and check sites such as Charity Navigator to see if the group has been the subject of law enforcement actions;
- Never disclose personal information, including your Social Security number;
- Be wary of organizations that rely on emotional appeals for donations but are vague on how the money will be spent;
- When donating online, make sure that you are using a secure payment method;
- Always give contributions by check made to the charity and never give cash.