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Brown Releases Report Detailing Use of Funds Raised by Commercial Fundraisers in 2008

Friday, December 4, 2009
Contact: (415) 703-5837

Sacramento – Attorney General Edmund G. Brown Jr. today released his office’s annual report on commercial fundraisers, which finds that, while 1,359 commercial fundraisers in California raised almost $400 million in 2008, charitable organizations received less than 42% of those funds.

“Some commercial fundraisers do an excellent job of ensuring that the vast majority of funds they raise go to the charities, not to overhead or themselves. Others raise little, or worse, leave the charities in the red,” Brown said. “Donors should do their homework before giving and consider how they want their contributions spent.”

Commercial fundraisers, who are hired by charities to raise money on their behalf, typically charge a flat fee for their services or a percentage of the contributions they collect.

By law, commercial fundraisers must register with Brown’s office prior to fundraising in California and must file annual financial disclosure reports detailing income and expenses for each fundraising campaign.

According to reports filed with Brown’s office, commercial fundraisers collected $399.9 million in donations in 2008.

In total, just $167.6 million—or 41.9% of the funds raised—actually made it to the charities. The remainder was retained by the commercial fundraisers as payment of fees and expenses.

These figures, however, are averages and do not provide the full picture. Some charities received the vast majority of funds raised on their behalf, including:

• Doctors without Borders, who received $2.8 million, or 70%, of funds raised by its commercial fundraiser.
• Special Olympics Southern California, who received $366,306, or more than 75%, of funds raised by its commercial fundraiser.

Brown’s office also publishes the Guide to Charitable Giving for Donors that provides advice, guidelines and information to help donors make informed decisions about giving. The Guide suggests that donors:

1. Ask the solicitor how a donation will be distributed.
2. Ask what percentage of donations will be used to pay for fundraising expenses.
3. Ask if the solicitor works for a commercial fundraiser and is being paid to solicit.
4. Avoid cash donations.
5. Avoid giving credit card information to a telephone solicitor or in response to a telephone solicitation.
6. Learn about a charitable organization, its activities and its fundraising practices before giving. Brown’s office maintains a searchable online database on registered charities at: http://rct.doj.ca.gov/MyLicenseVerification/Search.aspx?facility=Y, and on registered commercial fundraisers at: http://cfr.doj.ca.gov . Donors can also check the Web sites of the Wise Giving Alliance at: www.bbb.org/us/charity and the American Institute of Philanthropy at: www.charitywatch.org.

The Guide is available online at: http://ag.ca.gov/charities.

The Attorney General’s annual report on commercial fundraisers, currently in its 17th year of publication, can be found at: http://ag.ca.gov/publications.php.

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