the Winter 1998/1999 Watchdog Report
Grant Wish of Telemarketer
When someone calls on the phone and asks you to donate
to an organization with a name like Childrens Wish Foundation
International, wouldnt you like to think that most of
your money would help grant the wishes of terminally ill children?
When AIP President Daniel Borochoff got this call at his home in
Maryland, he did what any informed donor would do he asked
how much of his contribution would go to the telemarketing company.
The caller, who had identified herself as a telephone solicitor
for Reese Brothers Company, asked her supervisor and came back with
a figure of a set amount, no more no less. When Mr.
Borochoff asked her to clarify, she asked another superior and then
stated, Almost 100% goes to charity.
This statement seems curious since the Childrens
Wish Foundations 1997 federal return showed a budget of $21.3
million, with $12.9 million, or about 60% being paid to Reese Brothers.
The actual amount spent on granting dying childrens wishes
was reported as $1.9 million, about 9% of the organizations
total expenses, to complete 207 wishes, and another $0.4 million
was spent on related services. $11.6 million, or about 84% of this
charitys program service expenditures, were used to distribute
educational material about wish children to the general public.
The groups tax-return indicates that nearly all such materials
were distributed in conjunction with a fundraising solicitation.
How can a telemarketer that is paid nearly $13 million
tell donors that almost all of the money will go to charity? According
to state law in Maryland and other states, all money collected by
an outside professional fundraiser must go directly into an account
controlled by the charity. The fundraisers may receive a large chunk
of that money later on, but to say that it all goes to charity is
not technically a lie. It is however, very misleading. In a 1988
ruling, the Supreme Court deemed it unconstitutional for any regulator
to require charitable fundraisers to say something they do not want
to say when speaking to potential donors. At the same time, professional
fundraisers have a financial incentive not to volunteer the percentage
of each contribution that ends up in their hands.
Giving in response to a slick telemarketing appeal
is tricky business. A wise donor finds out what the professional
solicitors cut is before making a donation.