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WISCONSIN PARALYZED VETERANS RATED AS

"INEFFICIENT" CHARITY -- Professional

telemarketers took 86 cents of

every donated dollar.

 

 

Story here... http://www.jsonline.com/
story/index.aspx?id=578317

Story below:

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Veterans charity rated inefficient

86 cents of every $1 raised went to telemarketer

By ERICA PEREZ
eperez@journalsentinel.com

For every dollar Wisconsin residents gave to telemarketers on behalf of Wisconsin Paralyzed Veterans of America in 2005, the charity got just 14 cents, earning the non-profit the lowest possible ranking from a charity watchdog group.

The group got the rating because of its contract with for-profit telemarketer Insight Teleservices Inc. of Southfield, Mich. In 2005, Insight cold-called Wisconsin residents and raised about $812,500 on the charity's behalf. Of that, the group got about $113,750, according to its annual report. Insight kept the rest - 86%.

Charity Navigator, a non-profit that posts online ratings of about 5,000 charities, added the veterans group to its database last month. Out of 71 Wisconsin charities listed, it was the only one to earn zero stars. It rated the charity low because more than 65% of its expenses went to fund raising. Most non-profits spend no more than 10% on fund raising, said Charity Navigator spokeswoman Sandra Miniutti.

The rating puts the veterans group in the bottom 2% of charities on the Web site, Miniutti said.

Founded in 1955 and based in West Allis, the group is one of 34 chapters of the national Paralyzed Veterans of America.

The Wisconsin chapter spends about $300,000 a year on advocacy, legislation, employment services and rehabilitation at the Zablocki VA Medical Center for veterans with spinal cord injuries. It's also a co-host of the National Veterans Wheelchair Games in Milwaukee this year. Fund raising for that event was not done through telemarketing.

The typical cut for telemarketers is not clear, and Wisconsin is not one of the 10 states that track professional fund-raisers. But in California, the attorney general's office found the average charity received 37% of the revenue raised by commercial fund-raisers in 2004, a figure that is still considered low by charity standards.

"Come on, if the donor knew that only 14 percent of the money was going to make its way to the charity . . . people would refuse to give," said Daniel Borochoff, president of American Institute of Philanthropy, another charity watchdog group. "That's what's wrong with this."

Borochoff said Americans give 2 percent of gross domestic product to charity each year, so the pot of money is limited. The $700,000 that donors gave to Insight in the name of the non-profit would otherwise have been spent on good causes, he said.

"They're taking money out of a charitable giving pool and giving it to professional fund raisers instead of charity," he said.

A representative from Insight did not return calls for comment Thursday.

The charity's executive director, Don Fell, said it doesn't have the manpower to raise $100,000 on its own. He also said all the money the charity gets is well spent.

"All the monies we spend go to serving our members," Fell said. "Other VSOs (veterans service organizations) have a huge membership base and can raise money through dues, fund-raisers, doing mailings. We can't do that."

The veterans group has 272 members. On top of what it gets from telemarketing, it gets nearly $200,000 from the national group and about $8,000 from direct solicitations, Fell said.

The group has four paid staff members including Fell, who earned about $43,000 last year. The board is made up of unpaid paralyzed vets.

Brian Walker, a recreational therapist at the Zablocki VA Medical Center from 1993 to 2006, said the charity had paid for new computers for the spinal cord injury unit, trips to Brewers games for disabled vets and more.

"They're an advocate for veterans dealing with spinal cord injuries," he said. "The money that they do get, they spend real well."

The charity has been working with Insight for at least 10 years at roughly the same arrangements. Fell said he didn't think the group had any better options for raising the money.

But Sam Macklem, a partner at McDonald Schaefer Group, which provides fund raising to roughly 25 non-profits in Wisconsin and Illinois, disagreed. Her group has worked with small non-profits for significantly less money.

"They shouldn't be spending more than 10 or 15 cents on the dollar for fund raising," Macklem said.

Also, the Association of Fundraising Professionals code of ethics says fundraisers should not charge a percentage of donations.

Fell has visited Insight's operations center in Michigan. He described it as a huge complex with 30 to 40 telemarketers who can call through the state of Wisconsin in two weeks. Most people who get the calls have never heard of the veterans group, and they give $10 to $15 a pop, on average.

It's not clear how many of the national chapters use for-profit telemarketers.

Mark Dowis, spokesman for the national veterans group, said he knew for sure that at least one chapter - in Michigan - uses Insight.

The national group oversees the chapters' bylaws and programs, but not their fund-raising practices, Dowis said.
 

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Larry Scott  --