Dialing for Donations: Where Does Your Money Really Go?

abstract finger click donate sign
Getty Images
'Tis the season for giving. But when the phone rings and it's a charity calling to get you to donate, you might want to think twice before saying yes, even if it's a group you want to support.

Why? Chances are most of the money you give will go to the company that's soliciting you -- not the charity itself.

A report released this week by the Massachusetts Attorney General's Office, which requires solicitors to divulge how much of the donation they keep, gives insight into the business of charity fundraising. And it's a profitable business.

More than half of the money raised by solicitors on behalf of charities went to the solicitors, according to an analysis of the filings by those companies. The report includes 74 professional fundraisers that collected money on behalf of 439 charities.

They raised $389 million in 2013 and, of that, $185 million went to charities. Not all solicitors are created equal. Several delivered about 13 cents of every donated dollar to the charity. One gave 90 cents on the dollar.

"We encourage people to give generously to charities, and to do some basic research to ensure that their donations are going to a worthy cause," Massachusetts Attorney General Martha Coakley said. "During this holiday season and throughout the year, make sure you know where your donation is going, what it will be used for, and how much will ultimately benefit the charity and the mission that it supports."

If you get a call seeking money for a charity, ask these questions before you consider making a donation:
  • Who is making the call? Is it a professional fundraiser or a volunteer?
  • What percentage of your donation will go to the charity?
  • Double-check the name of the charity the solicitor is call on behalf and what the money is to be used for? (Some charity names used by solicitors are similar to well-known charities and are intended to confuse consumers.)
Read Full Story