State Warns of Commercial Fund-Raisers

Companies hired to seek and collect charitable donations passed less than half of those contributions to the charities last year, Atty. Gen. Dan Lungren said. The state Department of Justice released a report on charitable giving to coincide with the holiday surge in donations. According to the eighth annual report on commercial fund-raisers, 206 firms raised money for charitable groups in California last year. Such firms are for-profit ventures that contract with charities to raise money in the charities’ names. The companies make money by charging a flat fee or taking a percentage of the contributions they collect. In 1997, they raised about $193 million--less than 5% of all money collected for charitable purposes in the state. Just $84 million went to the charities, the report said. The rest went to fund-raisers’ profit and solicitation expenses. However, the 43.7% of the money that went to charities marked an increase over 1996, when the figure was 37%, Lungren said.