(Grant Cornett/ Bloomberg Markets ) - Carol Patterson, a former fundraising volunteer for the American Diabetes Association, says she feels betrayed by the American Diabetes Association after learning that just 22 percent of the money she helped raised went to the group.
Carol Patterson was waiting for a call from her doctor. When the phone rang on that afternoon in August 2011 at her home in Cortland, Ohio, it wasn’t a physician on the other end. A woman named Robin said she was representing the American Diabetes Association.
Robin didn’t ask for money. She asked Patterson to stamp and mail fundraising letters to 15 neighbors. Both of Patterson’s parents and one grandmother had been diabetic, so she agreed to do it.
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“I thought since it does run in the family, it wouldn’t hurt for me to help,” says Patterson, 64, a retired schoolteacher. She guessed, based on what she knew about charity fundraising, that 70 to 80 percent of the money she brought in would be used for diabetes research.
In fact, most of the money Patterson, her neighbors and people like them across the country raised — almost 80 percent — never reached the Diabetes Association. Instead, that money went to the company that employed Robin and an army of other paid telephone solicitors: InfoCision Management.
Just 22 percent of the money the association raised in 2011 from the nationwide neighbor-to-neighbor program went to the charity, according to a report on its national fundraising that InfoCision filed with regulators.
“It’s like a betrayal,” Patterson says, sitting in her kitchen in June, after being shown copies of the North Carolina report and the contract the association signed with InfoCision. “I know I won’t donate again.”
Many of the nation’s biggest-name charities have signed similar contracts with telemarketers during the past decade.
Charities should never agree to contracts with telemarketers where they receive only a small percentage of the funds donated through the calls, says Ken Berger, who runs Charity Navigator, the nation’s largest nonprofit watchdog group. “These organizations were created to provide public benefit,” he says. “The fact that the vast majority of money is instead lining the pockets of telemarketers defies the whole reason behind the very creation of these charities.”
The American Cancer Society, the largest U.S. health charity, enlisted InfoCision from 1999 to 2011 to raise money.
In fiscal 2010, InfoCision gathered $5.3 million for the society. Hundreds of thousands of volunteers took part, but none of that money went to fund cancer research or help patients, according to the society’s filing with the Internal Revenue Service and the state of Maine.
In fact, InfoCision kept 100 percent of the funds it raised, plus $113,006 in fees from the society.
Major charities are fully aware of what telemarketers will tell potential donors under these sorts of contracts. InfoCision scripts approved by both the Diabetes Association and the Cancer Society for campaigns in 2010 — described by the telemarketer as “neighbor-to-neighbor” — instructed solicitors to say, when asked, that at least 70 percent of the money raised will be used for charitable purposes.
Yet in contracts with InfoCision, the charities said they expected that the telemarketer would keep more than 50 percent of the money it collected.
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