AG: More than quarter of NY donations for fundraising costs
New York State Attorney General Letitia James
Credit: Marcus Santos
More than a quarter of the charitable donations by New Yorkers last year ended up in the pockets of professional fundraisers to cover the philanthropic campaigns, according to a report released Monday by State Attorney General Letitia James.
The annual "Pennies for Charity" report, released in advance of the global charity effort, Giving Tuesday, found that the amount of money going directly to charity in 2021 was virtually unchanged from one year prior and just slightly up from 2019.
“When New Yorkers make the generous choice to give to a charity, they trust that their money will be used responsibly,” James said. “In advance of the holiday season and Giving Tuesday tomorrow, New Yorkers can rest assured that my office is working every day to protect their wallets and deliver the transparency they so rightly deserve."
Despite the COVID-19 pandemic’s continuing economic impact, 658 charitable campaigns organized by professional fundraisers in New York in 2021 raised more than $1.7 billion — an increase of almost $250 million from one year earlier, the report found.
The charities netted more than $1.2 billion, or 73% of the proceeds last year, while professional fundraisers’ fees and expenses totaled $464 million, according to the report.
While the data shows many campaigns donated most of their proceeds to charitable organizations, others kept a higher percentage of the money.
In 42% of campaigns, the charities received less than half of the money raised, the report found. Expenses exceeded revenue with 15% of the campaigns, costing the nonprofits more than $10 million, according to James's office.
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.
As of October, there were 92,782 charities registered with the Charities Bureau. In 2020, approximately 1.5 million New Yorkers who itemize deductions on their tax returns reported $46.8 billion in total charitable contributions, the report said.
The study found a 9% uptick in online giving in 2021, while telemarketing — one of the costliest and most fraud-prone mechanisms for charitable fundraising — declined slightly, the report said.
To ensure that donations reach reputable charities that do the most good, the attorney general's office recommended getting familiar 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.
Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.
