It’s Your Money: Charities don’t always benefit from professional fundraisers

It’s Your Money: Charities don’t always benefit from professional fundraisers

COLUMBIA, S.C. (WMBF) - Many charities hire outside companies to help with fundraisers, but often, only a small percentage of the donations goes back to charities.

Professional solicitors gather donations through Bingo games, phone calls, mail and in person.

WMBF News found around 100 charities based in South Carolina work with professional solicitors to fundraise. Around half of the charities receive less than 5% of the overall money raised.

“These professional fundraisers are keeping a large amount of the donations and very little is going toward the charitable purpose," explained South Carolina Secretary of State Mark Hammond.

Hammond said many professional fundraisers keep 85% of the profits. He thinks this information is important for donors to know before they hand over money.

The Secretary of State’s Office publishes a Wise Giving and Professional Solicitor Report.

“We want to do everything we can here to let charitable donors know how much money is going towards the charitable purpose and how much money is going to fundraisers because we want the charitable donors to get the best bang for their buck when they give to charitable organizations,” Hammond said.

The report reveals which charities use professional fundraisers and how much they receive.

Bingo Halls generally keep the greatest percentage. South Carolina requires Bingo Halls to donate a portion of their money to a nonprofit. Many of the Bingo fundraisers report donating less than 5% to a charity.

Angela Schwindel owns Big Bucks Beach Bingo in Myrtle Beach. She admits the low percentage sounds bad but the report isn’t an accurate depiction.

“Absolutely not. What that report is showing is just our gross sales were. It doesn’t show what our payouts were to our customers or our clients to play bingo," she said.

Big Bucks Beach Bingo reported $1.1 million in gross receipts. Two percent was given to the charity.

Schwindel explained her business doesn’t keep the full $1.1 million. She estimated 75% is paid to bingo players for prizes before they walk out the door.

“So what’s left then, the 25% of that million, is all of our expenses which is payroll, supplies, taxes, everything and on top of the rebates that the state gives to our charity, which is about 4%, we are one of the few if not the only venue that gives an additional 3% out of our earnings,” she explained.

Adjusting the total, the percent to charity should be around 6%.

“I’ve been trying to talk to the Secretary of State to get them to change how they put that report out because it really makes bingo look bad where in reality only about 25% of that million is for us to pay expenses and donate to our charity,” Schwindel said,

Hammond said he understands the cost of prizes but thinks the public needs this information.

“I still believe that the person that has playing bingo that feels like they are helping charitable organizations should be aware that sometimes one or two percent is all that’s actually going toward the charitable purpose," Hammond said.

The Secretary of State’s Office also tracks how charities spend the money they do receive.

The Better Business Bureau recommends looking for charities spending 65% of their money on program services.

WMBF News obtained a list of charities registered in the state that reported spending less than 50% of its funds on its program fees. This means not all the money you donate is supporting the mission.

Nonprofits generally spend their money on administrative costs, fundraisers and programs that serve their mission.

More than 5,000 charities were on the list. Around half of those charities reported allocating less than 10%.

Two thousand organizations reported spending zero percent on its programs.

The state did explain some of the organizations reporting zero percent could be because they didn’t report any activity or didn’t separate program expenses from overall expense.

Hammond said there is no consequence for only attributing a small percentage to program services.

The state also uses complaints from consumers to open investigations into charities.

Hammond said last year his office received more than 80 complaints and many led to investigations.

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