June 27, 2019
Mass. Charities Kept 41% of Funds Raised by Pros Last Year

December 6, 2018 — Massachusetts charities that used professionals to solicit funds for them netted an average 41% of the proceeds collected through fundraising campaigns last year, according to a report recently released by the attorney general’s office, a drop from the year before.

The year before, in 2016, charities that used professional solicitors received 48% of the funds raised, a high-water mark.

Sixty-six conventional professional solicitors registered in Massachusetts raised $281 million in 2017 through 700 fundraising campaigns They transferred $115 million to nonprofits and kept $166 million, according to the attorney general's office.

The amount of funds going to charities that relied on conventional solicitors reverses a trend of recent years: In 2012, charities kept 30% of the funds raised by conventional professionals, increasing year by year to 48% 2016, as shown on the chart below:

There is no requirement that a minimum percentage or amount of funds donated through a professional solicitation campaign be passed on to the charity, and, historically, has varied widely – from 100%, meaning all funds raised went to the charity, to a negative percentage of funds raised, which means fundraising costs exceed the total raised.

Reasons for the wide variation in donations ending up with the charity, include the following:
  • Sometimes the costs of a campaign are front-loaded. For example, a campaign may incur significant database development and infrastructure costs in the first month, and if the campaign straddles two or more years, those costs will be reported only in the first year, and will be evaluated only in comparison to the donations received in that same calendar year.

  • In a “sustainer campaign” designed to obtain multi-year donation commitments, donations attributable to the campaign may come in for years after the campaign has ended. Such donations received in subsequent years may be directly attributable to a particular campaign, but are not reflected in the annual report for the year in which the campaign was conducted.

  • Some charities have a variety of goals for fundraising campaigns, such as increasing their donor base or exposure, some of which may not be reflected in the financial results of the professional solicitation engagement.

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