By Thomas Goldsmith
Good-hearted North Carolinians, many of them older people who are beseeched daily by charities for donations, can find reams of helpful state-compiled information on professional agencies and businesses that solicit for nonprofits.
Before letting warm impulses separate you from your cold cash, it’s a good idea to consult sources such as the annual report from the Charitable Solicitation Licensing Division of the Secretary of State’s office. The information’s there for a range of licensed solicitors, such as 33 Miles Touring, that raise money for hunger organizations by putting on Christian music concerts, to high-tech “donor engagement” businesses such as QCSS — a business process outsourcing company that can take on functions such as direct calling — and Ruffalo-Noel-Levitz, a company that specializes in higher-education and health care fundraising.
Attention must be paid, officials say, or these for-profit services can wind up leaving clients in the red, at least on paper.
“It is so important, for all of us who can, to give generously but wisely to make sure our donations are doing the most good for those in the most need,” Secretary of State Elaine Marshall said in a news release.
Tim Crowley, a spokesman for Marshall’s office, says the department encourages potential donors to conduct front-end research on professional fundraisers who work with charities that are being considered for gifts.
“It is important for older people and caregivers to be aware of how an organization they support financially is spending their donations, especially since many (older people) may be on a fixed income,” Crowley said in an email.
North Carolinians gave $58 million to charity through professional fundraisers in the 2022-23 state fiscal year, Marshall said. However, the percentage of that money that went directly to charitable operations decreased year over year.
‘Solicitation of charitable contributions is protected speech‘
Of this, $43,874,708.07 went directly to charities, resulting in an aggregate of 75.58 percent of the dollars raised going to charities’ programming, Marshall said.
Last year, 81.79 percent of what professional fundraisers raised went to the charities they were supporting, which was an all-time high for what went into the organizations’ operations.
There’s an important distinction to note here. Many nonprofit organizations use their own employees to raise money, or use a combination of outsourced and in-house efforts. But the report from the Secretary of State’s office details information about for-profit companies — many of them national — that conduct fundraising activities on behalf of charities.
The state focuses on the amount of donations that go directly to the charities’ operations, because big money can get diverted by professional fundraisers to boost their own bottom lines. And a U.S. Supreme Court decision from 1988 found in a North Carolina case that “solicitation of charitable contributions is protected speech.” North Carolina had created a tiered system, setting maximum percentage fees for fundraisers, but the justices also found that the system was “not narrowly tailored to the State’s interest in preventing fraud” and, in effect, violated free-speech protections.
According to the Secretary of State’s website, “While the Secretary of State’s Office regulates fundraising activity, pursuant to federal case law it cannot legally penalize a charity for using the majority of its donations on fundraising or administrative overhead.”
As an example, Tennessee-based 33 Miles Touring has raised $96,000 from North Carolinians since 2017, records indicate, to put on contemporary Christian music benefit concerts. But instead of passing along money to the charity the concerts were supposed to support, Arizona-based Food for the Hungry, the shows have lost a collective $313,572.
In a note attached to its 2019 campaign financial report, Jason Barton, president of 33 Miles Touring, wrote that his company left any collections or distributions of money up to its client.
“There are no outstanding payables,” Barton wrote.
In addition, 33 Miles Touring and other professional solicitors make the case that donors from North Carolina who gave via these fundraising agencies become loyal donors down the road.
To get the real lowdown, a potential donor should consult for what’s called a final accounting report on a professional solicitor. But the process isn’t quick. Here are the directions offered to reach this information:
- Go to www.sosnc.gov
- Click on “Divisions.”
- Under the heading “Charities” click on “Search Our Registry.”
- Use the search box to type in the name of the professional operation that’s raising money for the charity you’re interested in.
- On the “Search Results” page click on the name of the solicitor.
- Several prompts take you to documents including contracts the solicitor has with the charity.
- Click on “Campaign Final Reports,” scrolling to the last document for the most recent.
- Click “Doc ID number” for a PDF of the most recent report. Earlier reports are listed above it in the list.
“While a deficit is reported, professional solicitor(s) and charitable organization(s) anticipate that donors who contributed the campaign receipts will continue to give to the charitable organization on a regular basis and for an extended period of time,” Barton wrote. “Past experience with sponsors/donors acquired at public events like (these) shows that the net donations over time from such acquired sponsors significantly exceeds the initial expenses of the sponsored event.”
Crowley, the Secretary of State’s office spokesman, said he could not comment on the actions of a specific professional fundraising company.
“I can’t speak more on this specific organization; however, we always encourage people who are giving to charitable organizations to understand how their generous contributions are being spent, and they should not be afraid to ask the organizations upfront,” he said.
Liz Proctor, another spokesperson on charitable solicitation, noted that state records allow potential donors to look back through as much as 20 years of filing to see what kind of returns solicitors have consistently made to the nonprofits they are supposed to serve.
“If there’s a particular charity that you support, and you’re not liking the numbers you’re seeing, go back and see if they’re reporting similar numbers for every year,” she said. “Or you may see very different numbers in one given year because of the effect of something like a fundraising campaign beginning near the reporting deadline.”
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