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Brown Releases Report Detailing Use of Funds Raised by Commercial Fundraisers

Thursday, December 23, 2010
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 commercial fundraisers in California raised $391.5 million in 2009, charitable organizations received less than 43% of those funds.

“This report allows donors to make informed choices in their charitable giving,” Brown said. “Some commercial fundraisers are effective at generating millions for worthwhile charities but many others divert the majority of the donations to overhead.”

Among numerous other tables, the annual report contains an alphabetical list of charities that hired commercial fundraisers in 2009 – along with the total revenue raised in those campaigns and the dollar amount and percentage of total funds raised that went to the charity.

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 the Attorney General’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 $391.5 million in donations in 2009. This figure excludes thrift store operations and vehicle donation programs, which are accounted for in a supplemental report.

On average, $166.8 million – or 42.61% of the funds raised – went to the charities. The remainder was retained by the commercial fundraisers as payment of fees and expenses.

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. Donors can 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 http://www.bbb.org/us/charity/ and the American Institute of Philanthropy at http://www.charitywatch.org/.

The Guide is available online at http://ag.ca.gov/charities/publications.php#guides .

The Attorney General’s annual report on commercial fundraisers, currently in its 18th year of publication, can be found at http://ag.ca.gov/charities/publications.php#commercial_fundraisers .

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