Telemarketers keep millions in charity donations


by Diane Moca

MILWAUKEE--Charities are continually seeking creative ways to raise more money, so it can be tempting for non-profits to tap into funds they can receive with virtually no effort from volunteers.

But one local charity dropped a successful telemarketing campaign that helped generate hundreds of thousands of dollars in donations -- after losing more than 1,000 members who complained about it.

Yet that fundraising strategy is still being used by other local non-profits, even though many of their loyal donors don't realize the person on the other end of the phone may not be volunteering or working for the non-profit; they may be a hired hand working for a profitable telemarketing company.

"There are legitimate fundraising organizations that really help small charities," explained Wisconsin Better Business Bureau (BBB) President Ran Hoth. "There are going to be cases where they pay a very high expense rate to get the money."

The BBB says such fundraising organizations run call centers that take their cut first, before handing over donations to the charities they're representing, sometimes not leaving much for those in need.

"When you are contacted by a professional fundraiser, you may only see 10 to 15 or 20% that goes directly to your charity," noted Hoth.

"That's awful," responded Joanna Porterfield of West Allis. "If I'm donating money I want all of it to go to the charity, not to some call center."

That's how donors felt when they learned that Insight Teleservices kept a whopping 83% of all money it collected on the phone for Wisconsin Paralyzed Veterans of America.

Once supporters found out that Insight was keeping more than $400,000 in donations the company collected by phone each year, they griped enough to convince the organization to cancel its telemarketing contract last year.

Executive Director Paul Lehman says it took more than 10 years for the non-profit organization to end that relationship with Insight "because it was easy money."

Now the Wisconsin Paralyzed Veterans of America say they are suing Insight's owner for continuing to use the charity's member list to solicit donations for nine other non-profits with ties to that telemarketer's owner, and with names like Disabled and Paralyzed Veterans Fund, that sound similar to more well-known charities.

If you get a call requesting a contribution, the BBB recommends you check out the organization at before donating any money. That website links to the Wise Giving Alliance, where you can search the 160 charity names listed for Wisconsin to find out which ones meet the BBB's 20 standards for charitable accountability and which ones have not even released enough information to be evaluated.

"If a charity is not willing to be transparent and give you that information, don't give them any money," insisted Hoth.

While many charities in Wisconsin do disclose their budget and organizational structure, 15 of them didn't meet all 20 of the BBB's guidelines, including 6 the BBB says spent too little on services to fulfill the charity's mission or too much on fundraising.

One of those uses professional telemarketers -- Special Olympics Wisconsin.

"It's a very small part of what we do, but we think it's a very necessary part of what we do for a lot of reasons, financial and public education," explained Denny Alldridge, Special Olympics Wisconsin President and CEO.

Special Olympics Wisconsin says last year it used the Heritage telemarketing company to raise $457,000; the telemarketer got to keep $271,000, which is 59%.

"It meets our needs to serve our athletes," added Alldridge.

BBB's Hoth says before you pledge money over the phone, you should ask questions -- like if the caller works for the charity or a fundraising company.

"I want you to ask them to send you information from that charity about how that money is being used," he declared. He says if they don't send the info, then you shouldn't contribute to the cause.

"I guess you've kind of opened my eyes to a few things," noted Pam Masilotti of Milwaukee.

CBS 58 tried to get some information from Insight Teleservices in Michigan and The Heritage Company in Arkansas, but neither returned our emails or calls. We also reached out to Encore Music Productions, a professional fundraising organization in Manitowoc that is contracted by the Wisconsin State Lodge Fraternal Order of Police according to the organization's website, but Encore declined our offer to explain their fundraising efforts on camera.

The BBB recommends donating to your favorite cause through the group's own secure online website or by sending the organization a check directly in the mail, so all of your gift goes to the non-profit rather than to a middleman on the phone.

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