A recent report from the Office of the Attorney General, “Where Have all the Dollars Gone (2012)?” states that third party fundraisers are getting a much larger piece of the pie than the nonprofits those dollars are being raised for.
To be precise, the report says “…over the past two years Vermonters donated $6,052,835 to charities through paid fundraisers. Of this donation total, paid fundraisers retained $4,156,112, while the charities that hired them collected $1,896,723. This means that an average of 68.66% of Vermonters’ donations were kept by the paid fundraiser. The charities, on the other hand, ultimately received less than a third (31.34%).”
This is a pretty significant disparity, but according to Marth Maksym, the Executive Director of the United Way of Chittenden County, “the key phrase in this report is the phrase ‘paid fundraisers.’ UWCC and our Member Agencies do not use third party or paid fundraisers. Instead, our UWCC fundraising and theirs is done by volunteers. We are very proud of our success, and we attribute it to our exceptional volunteers.”
Maksym went on to quote Stuart Comstock-Gay, president of the Vermont Community Foundation, from a recent interview with Vermont Digger: “The vast majority of nonprofits are using money very well, very efficiently. Very few Vermont charities use paid fundraisers. Most can’t afford them, more than anything else.”
COTS’ supporters can easily see how donations are used (see pie chart below). COTS does not use third-party fundraisers. For FY2012, COTS had $3,306,502 in revenue; again, none was raised through use of third-party fundraisers.
These are pre-audited numbers. COTS’ FY12 deficit resulted from a combination of carrying costs for overflows shelters together with a more competitive fundraising environment. Development results near year-end were stronger, and overall FY12 expenses were at budgeted levels. Going forward, COTS will benefit from lower expenses related to closure of overflow shelters and reduced rent expenses.
Educating yourself on how the nonprofits you support raise revenue and manage expenses is always a good idea, and can help make you more confident about where your gifts are going during the holiday season.
Maksym reminds supporters, “This is the Giving Season and the time when nonprofits depend on the generosity of the community to continue the work that no one else in Vermont is doing. “