Don't donate blindly to police and fire groups

By Lifestyle and Budget Consumer Reports

You get a phone call or letter asking you to donate money to benefit police or firefighters. Who wouldn’t want to help?

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But would you give if you knew that 85 cents of every dollar or more would go to the professional fundraising company that contacted you?

A lot of the fundraising requests that tug at your heartstrings, including many of those on behalf of police and fire groups, often end up benefiting fundraising firms far more than the nonprofit organizations they represent.

 “People hear the words ‘police’ or ‘fire’ and they assume, sometimes wrongly, that someone on their local force is going to be helped,” said Bennett Weiner, who runs the BBB Wise Giving Alliance, a charity watchdog.

Consider two police-related fundraising calls a Consumer Reports employee recently received at home. One was on behalf of the Police Conference of New York, which the group’s website says “is recognized by key state elected officials and agency department heads as the preeminent professional police union in New York State.”

When questioned, the fundraiser told the staff member that “not less than 15 percent” of the donations would go to the group, as opposed to the fundraiser.

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In the second call, on behalf of the New York State Association of PBAs, the fundraiser revealed that “not less than 10 percent” of the money would go to the group, an organization of public safety unions that does business as the New York State Police Association.

In their IRS filings, neither group reported providing any grants or other direct assistance to individuals, such as injured police officers or their families. Also, donations to the groups aren’t tax deductible.

For more advice, read "Make Sure Your Donation Counts."

Fundraisers take the biggest share
 

These kinds of paltry returns from professional fundraisers, who solicit on behalf of police and fire organizations, as well as other groups, are common. A 2014 report (PDF) by the New York attorney general found that of the $249.3 million donated in 589 professional fundraising campaigns in 2012, only $94.5 million, or 39 percent, went to the nonprofits.

According to the latest return the New York State Association of PBAs filed with the IRS, the group’s three 2012 fundraising campaigns returned nearly $467,000, of which just $75,000, or 16 percent, went to the organization.

The return filed by the Police Conference of New York for 12 months ending May 2013 showed that less than $148,000, or 24 percent, of the $613,476 raised went to the group.

Richard Wells, president of the Police Conference of New York, says the organization uses a professional fundraiser because it couldn’t do any better raising money on its own, after deducting the cost of office space, telemarketers, and phone lines. And by using a professional, he says, the organization doesn’t risk losing money if donations don’t cover the cost of the fundraising campaigns.

Daniel Borochoff, president of the watchdog CharityWatch, says the groups should find better ways to raise money than using expensive “cold call” telemarketing, such as seeking grants or soliciting from the police officers, whom the organizations benefit. Borochoff says that groups that allow most of their donations to go to professional fundraisers hurt all nonprofits because there are only so many charitable donations to go around.

“If they can’t raise money reasonably, they should stop doing it and stop wasting our charitable dollars,” he said.

What to do

 

Check out a group before giving. Never give on the spot. Instead, investigate any organization that’s requesting support. Unfortunately, the big charity watchdogs, including CharityNavigator, don’t have reports on many local nonprofits. But check anyway. Some Better Business Bureaus, for instance, evaluate local organizations. (The Police Conference of New York did not respond to the BBB’s request for information. There was no BBB report on the New York State Association of PBAs.)

Another option is to examine a groups’ tax filings (form 990), which are available with free registration at GuideStar. To find the forms, search for the group’s name, then go to its page and click the “Forms 990 & Docs” tab. Interpreting Form 990 can be a little daunting, but you may be surprised at what you can learn right away. The Nonprofit Coordinating Committee of New York offers a primer for reading Form 990 if you’d like to become a charity super sleuth. Remember that just because a group doesn’t use a professional fundraiser doesn’t mean it’s not spending too much on fundraising, as opposed to its charitable program, which the BBB Wise Giving Alliance says should account for at least 65 percent of a group’s spending.

Avoid the fundraiser. Ensure that your entire donation goes to the nonprofit by saying no to the professional fundraiser and giving directly to the group.

Verify tax deductibility.  If you’re counting on a tax deduction, verify that contributions to the group are tax-deductible. Ask the group or search the list in IRS Publication 78.

—Anthony Giorgianni

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