Making a Profit From Charitable Gifts : Valley Fundraisers Inc. Exists Mainly to Serve Itself
Some groups that solicit money for charitable organizations and causes are extremely efficient. The best make sure that all but a small fraction of the money goes toward its predetermined purpose. By that standard, few have been more diligent than Valley Fundraisers Inc. of Burbank. Some 88% of the $607,947 raised by the company last year went precisely where President Thomas Galambos intended. Unfortunately, the goal was keeping most of the money, and making a profit.
It meant that groups such as the American Wheelchair Veterans Assn. and the AIDS and Cancer Research Foundation of Beverly Hills received as little as 10.2% of the money Valley Fundraisers gathered on their behalf.
As detailed by Times reporter Doug Smith, we note that there is nothing illegal about Valley Fundraisers’ activities. Galambos’ company is licensed and bonded in the city of Los Angeles as a fund-raising firm. Its contracts with charities point out the percentage of receipts that will be turned over to them: from 10% to 16%. Valley Fundraisers’ operations have been closely scrutinized, and no law enforcement agency has found cause to shut it down.
That’s because Valley Fundraisers is part of an unregulated industry of about 165 commercial fund-raising organizations in California that raise nearly $100 million annually in charitable dollars, for profit. The law provides no limit on how much of that money these companies can keep. In fact, according to U. S. Supreme Court rulings, they are shielded from such restrictions by the First Amendment right to protected speech.
Galambos unabashedly considers his company an example of free enterprise that helps about 40 or so down-and-out men earn money by acting as telephone solicitors. He says he keeps five charities afloat with donations, but others feel differently.
State Atty. Gen. Dan Lundgren, says that commercial fund-raising groups in the state give An average of just 30% of the money they raise to charitable groups. Lundgren brands this as “illusory charitable giving.” To Robert Burns, general manager of the Los Angeles Social Services Department, it “erodes the integrity of the entire charitable sector.” Also, the two standard-setting national fund-raising organizations in the U. S. consider it unethical to solicit funds for a percentage. It is also true that the charitable groups that rely on Valley Fundraisers for help are desperate and unable to devote time and resources to fund raising.
We have solutions. First, those who want to donate money to groups that have been clients of Valley Fundraisers’ can do so directly. They include a group called Helping Hands for the Blind, the Brotherhood Rally of All Veterans’ Organizations, and Adopt-a-Family, and they are legitimate groups in good standing with the L. A. Social Services Department, the Registry of Charitable Trusts, and the Internal Revenue Service.
Next, those who want to know which charitable groups donate the greatest percentage of their funding to programs, and not to overhead, can consult such publications as Money Magazine. Its December issue ranked the 100 largest national charities by that standard. The Philanthropic Advisory Service of the Council of Better Business Bureau’s “Give But Give Wisely” guide, and the National Charities Information Bureau’s “Wise Giving Guide” provide the same invaluable service.
In times such as these, when local and state governments are forced to cut back on the amount of social-service funding they can provide, and when individuals are hard-pressed to be as generous as they have been in past years, it is important that every charitable dollar go as far as possible toward serving those in need. Valley Fundraisers, and groups like it, are primarily in the business of serving themselves.
