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January 18, 2021
 
Mass. Charities Netted 47% of Funds Raised by Pros Last Year
Fundraising thermometer

November 27, 2020 —Massachusetts charities received 47% of the funds raised last year on their behalf by professional solicitors, and while that share was higher than the year before, the total amount raised by professionals was down 31%, according to a report released on Tuesday by the attorney general.

Of $127.6 million raised in 2019 by conventional professional solicitors registered in Massachusetts, $60.2 million went to charities, according to the report.

The previous year, professional solicitors raised more—$177 million—for Massachusetts charities, but transferred 45% to those organizations. However, that was up from the 41% turned over to charities the year before that.

In calendar year 2019, 46 professional solicitors reported conducting 518 fundraising campaigns in 2019 for Massachusetts charities, the AG’s office reported.

The number of professional solicitors raising funds for Massachusetts charities has steadily dropped from a high of 97 in 2011.

In 2018, professional solicitors undertook 645 fundraising campaigns for Massachusetts charities, down 8% from 700 campaigns in 2017.

The drop in funds raised in 2018 may be explained, in part, by major federal tax law changes that took effect at the beginning of that year, doubling the standard deduction, which in turn made it harder for some donors to take advantage of the charitable tax deduction. That trend may have continued into 2019.

Over the last 10 years, professional solicitors transferred an average of 43% of the funds they raised to the charities that hired them. The largest share transferred to charities was 49% in 2011; the lowest share was 34% in 2012.

The chart below, based on data from the attorney general's office, shows fundraising results generated by professional solicitors since 2011.

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 exceeded 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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