State reports on fundraising are easily misinterpreted

fundraisingRecent reports have called into question the relationship between professional fundraisers such as InfoCision and the nonprofit organizations they represent; asserting that, based on information from state mandated fundraising disclosures provided to state Attorneys General, professional fundraisers are keeping a  percentage of the funds raised. In InfoCision’s case, nothing could be further from the truth. Please see our website for our full statement on this issue.

A similar report recently made headlines in Vermont, and I want to draw to your attention to this story in the Burlington Free Press because it is a great example of how Attorney General (AG) reports can be misinterpreted; and paint good organizations in a negative light. According to the AG report, “Professional Fire Fighters of Vermont (PFFV) raised $1.4 million through FireCo., LLC of Franklin, Tenn., of which $314,256, or 22 percent, went to the charity, and 78 percent, or about $1.1 million, went to FireCo.”  Rightly so, both the PFFV and FireCo. have called the report misleading. “We’re in dispute with the attorney general,” said Matt Vinci, president of the Professional Fire Fighters of Vermont. “The way he’s put percentages out, they do not depict our operation.”  But when later asked to expand on the report, Vermont AG William Sorrell stated, “They’ve got employee and overhead costs, we’re not trying to suggest the paid fundraiser pockets 68 cents or 84 cents of every dollar,” Sorrell said.

An issue with the state mandated disclosures is that they fail to take into account the type of campaign that was run, overhead and other factors, and that makes them nearly impossible to accurately interpret. Many, many nonprofit organizations utilize professional fundraisers to raise funds on their behalf because it is the most cost effective way to raise funds on a larger scale. As Vinci says in the article, “We couldn’t have a bunch of firefighters doing this level of work (as volunteers).”

So please, when you see these reports, make sure you know the whole story before drawing your own conclusions. As I’ve said before, the true measure of whether any charitable organization is a good steward of the funds with which it is entrusted is the Nonprofit’s Form 990 filed each year with the IRS. Form 990 provides a comprehensive summary of what percentage of money a charitable organization spends towards its goals and mission, typically 75%, and the percentage used for administrative costs, which includes fundraising, and is typically the remaining 25%.

I encourage you to read a recent article in CUSTOMER magazine that details the role professional fundraising plays in helping charitable organizations accomplish their goals and mission.

Please feel free to leave a comment or question you may have on professional fundraising. One way for the truth to come out is to have an educated dialogue and I welcome your thoughts.