Millions donated to Charlotte’s charity never made it there
Of nearly $6 million raised by a professional fundraiser on behalf of the Charlotte-Mecklenburg Fraternal Order of Police since 2003, the FOP has raised $1.5 million.
CHARLOTTE, NC — Charities in the Carolinas make money when they hire professional fundraisers to solicit on their behalf, but millions of dollars in donations never reach the intended organizations and the donors don’t. probably don’t know.
A WCNC Charlotte analysis of public records found that when nonprofits hire professional fundraisers to solicit on their behalf, most of the time these private companies raise more money than the charities that hire them. .
“There are good professionals in this field and then there are organizations or groups of people or individuals who are either excessive in their fees or just not efficient in delivering services,” the secretary said. of North Carolina State, Elaine Marshall. “I think most people want their money to go as far as possible to support this charity, as opposed to overhead.”
In North Carolina alone, state records from 2020 and 2021 identified 200 charities that received less than 50% of donations raised by companies they hired.
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Only 25 cents of every dollar goes to the local Fraternal Order of Police
The Charlotte-Mecklenburg Fraternal Order of Police, like all other FOPs in North Carolina and South Carolina, received well under half of all profits. The lodge relies on donations to fund its Cops and Kids program, which provides gifts and school supplies to vulnerable children.
The organization hires Area Benefits, Incorporated, a professional Georgia fundraising firm, to call potential donors on behalf of FOP. Over the past 20 years, FOP has received an average of approximately 25% of all donations collected by ABI. This equates to just over $1.5 million.
“Without this partnership, we wouldn’t be able to raise the amount of money we are making,” said FOP President Daniel Redford.
While the charity is grateful for the tens of thousands of dollars raised annually by ABI, WCNC Charlotte’s review of state charity filings identified an additional $4.4 million in 2003 to 2021, or about 75%, which went to ABI.
“When you look at it for what it is, out of context, that’s a big number,” Redford said. “When you start to figure out where that money is going, nobody gets rich. They have phone bills. They have employees they have to pay.”
The FOP’s longstanding contract stipulates that the nonprofit is guaranteed a minimum of 20% of all revenue or at least $60,000 per year. The contract describes the final distribution of funds as a 50-50 split after a promotional coordinator gets a 40% discount and after deducting fundraising expenses.
“Do you think people who donate realize that 25 cents out of every dollar goes to this lodge?” WCNC Charlotte asked.
“I think that would be a question ABI would do well to answer,” Redford replied.
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WCNC Charlotte posed this question to ABI President Gary Coyne.
“I can’t speak for the public myself,” Coyne said. “I know for a fact that the public knows law enforcement doesn’t make the calls themselves.”
Coyne said ABI uses a state-approved script that discloses its locally hired employees as paid attorneys calling on behalf of the Fraternal Order of Police. He said ABI’s expenses include licensing, bonding and registration, as well as office staff.
ABI’s most recent report to the state, filed in June 2022, shows gross income of just under $290,000, of which approximately $116,000 would have gone to salaries, fees, commissions and benefits, 11 $700 would have gone to office expenses, rent, furniture, equipment and utilities and about $7,600 covered telephone, printing and postage. The document lists ABI’s net proceeds from the telemarketing campaign as $77,287.70, which is equal to the amount FOP received that year.
State laws require professional fundraisers to declare the amount they raise and provide copies of their contracts. WCNC Charlotte used these deposits to conclude that most fundraising services end up collecting the lion’s share of donated dollars.
Too much overhead
The Better Business Bureau standard sets a baseline for charities to take home at least 65% of all funds raised. The most recent state filings identify a range of charities that receive significantly less than 65%, including nonprofits focused on food, cancer and other medical priorities.
Tom Bartholomy, president and CEO of the Better Business Bureau, said the practice leaves donors with a bad taste.
“They believe they’re doing good, they’re having an impact,” he said. “And when they find out that’s not the case, it stops them from donating to anyone.”
Bartholomy said charities that receive less than 65% spend too much on overhead. He prefers to give directly to an organization.
“I would never contribute to a professional promoter calling me on the phone,” Bartholomy said. “If you want to have that impact that every donor tells us they want to have, donate directly to this organization. They’re pretty easy to find. They all have websites.”
Marshall has an even higher bar for charitable giving. Her personal preference is “75% or better,” but neither she nor state leaders can tax the amount charities receive.
US Supreme Court case in North Carolina sets precedent
A 1988 U.S. Supreme Court decision from North Carolina found, based on First Amendment rights, that states cannot determine “reasonable fees.”
“We can’t do that,” Marshall said. “I came to power thinking I could because I wanted to make sure charities got as much as they could.”
In its ruling, the nation’s highest court also determined that professional fundraisers do not have to share cost allocations up front with potential donors. However, if asked, they must provide this information.
“If asked, they are expected to tell the truth and explain what the funding is for,” Redford said of the FOP attorney.
WCNC Charlotte always asks “where’s the money?” If you need help, email WCNC Charlotte [email protected].
The ABI chairman said the company, which according to filings also was recently approached for FOP lodges in Asheville, Durham and New Bern, is meeting that expectation. Coyne said when potential donors ask for details, his employees are always transparent.
“It happens all the time,” Coyne said. “We direct them to the Secretary of State’s website. If someone starts asking what the outages are, that’s when we direct them to the Secretary of State.”
FOP to “re-explore” how it captures money
Charity deposits show, in the most recent telemarketing campaigns, that other FOP lodges in North Carolina received a slightly higher percentage of donations compared to the Charlotte-Mecklenburg lodge. In light of questions from WCNC Charlotte, Redford said if the FOP can negotiate a more favorable deal in the future, the organization will. After all, the end goal is to give back to the communities that local police serve.
“If this is an opportunity for us to re-explore the way we capture this money, we are all in agreement to make changes that can benefit us, as it would benefit us more to be able to receive more of this money,” he said. said Redford. “We are very grateful for this partnership, but if there is ever an opportunity in any area of our organization to do a little better, then that is something we will always explore.”
Do your homework
Marshall urges people to do their research by reviewing each charity’s annual fundraising results, which are posted online each year in North Carolina and South Carolina. She also recommends donating only to local charities and before donating money, check whether the charity will allow visitors or volunteers, so that potential donors can get a better idea of the nonprofit organization.
There are several websites that can help you evaluate a charity.