Telemarketing companies that raised money on behalf of Colorado charities and other nonprofit groups in 2005 kept more than half of what was collected, a percentage that state officials on Wednesday called disconcerting.
About one-sixth, or 41, of Colorado charitable campaigns received less than a dime for every dollar collected over the phone, according to a state report unveiled Wednesday. Only one campaign got more than 90 cents per dollar raised.
The report, released by Colorado Secretary of State Gigi Dennis, showed that 47.5 percent of contributions made through telephone solicitations actually go to charities.
That’s down from 54.5 percent in 2004, but up from 41 percent in 2003, the first year the report was issued.
State officials decried the decline.
“Way too few dollars are going to charities,” Colorado Attorney General John Suthers said.
Since 2002, charities and the solicitors they hire to raise money over the phone must register with the state and disclose how much of the donations they keep as fees. In Colorado, phone solicitations on behalf of nonprofit groups and causes raised $164 million in 2005, up from $96 million in 2004, the report showed.
The money taken in by charities also increased, from $52.8 million in 2004 to $78 million this year.
Coloradans annually contribute $2.4 billion to nonprofit groups, according to the Colorado of Association Funders, a foundation trade group. About 1 percent is raised through telephone solicitations, state officials said Wednesday.
But the number of paid telephone campaigns is increasing, the report showed.
In 2005, there were 257 paid solicitation campaigns. That’s up from 215 in 2004 and 77 in 2003.
Some phone solicitors pocketed all of the collections. However, that could be because fundraising costs were charged on the front end of a multiyear campaign, said Charley Shimanski, chief executive of the Colorado Nonprofit Association, a trade group.
Another reason was that the telephone campaign was used to kick-start a direct mail effort, said Jay Mount, head of MDS Communications Corp., a Mesa, Ariz., company that raises money. “It can be misleading,” he said of the report.
The largest number of campaigns, 67, returned between 10 cents and 19 cents on the dollar to their charities. Some other returns were: 20-29 cents, 29 campaigns; 30-39 cents, 25; 40-49 cents, 23; 50-59 cents, 23; 60-69 cents, 27; 70-79 cents, 19; 80-89 cents, 2; 90 cents-$1, 1.
The industry standard, the report said, is 35 cents.
Many telemarketing companies that ranked near the bottom on some campaigns ranked near the top on others.
“It has to do with the type of campaign,” Shimanski said. “Some campaigns are easier to raise money for than others.”
Still, state officials said the report is a good resource for skeptical donors looking to make sure their gifts are used wisely.
Most nonprofits and their telemarketing partners are doing a good job, Dennis said, “but there are few unscrupulous ones out there.”
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
