Telemarketer kept 87% of charity's donations

CBC News Wednesday, September 22, 2010

Several charitable organizations in B.C. use fundraising companies that keep more than half the funds they raise for the charities, a CBC News investigation has found. In 2008, the most recent year for which CBC News could access complete records from the Canada Revenue Agency, 118 B.C. charities hired external fundraisers and 38 of those fundraisers kept more than the 50 per cent of the money donated. The B.C. Wheelchair Sports Association, which runs programs to help people with disabilities participate in sport, is one example of a provincial charity that will accept the terms some telemarketers demand. In 2009, the Calgary-based telemarketer Xentel kept more than $126,000 of the $145,600 — almost 87 per cent — it raised in the charity's name. The association has used Xentel in its fundraising efforts for more than 10 years. In every year since 2003, Xentel has kept more than 60 percent of the money it raised, documents show.Both the charity and Xentel refused a CBC News request for a broadcast interview. B.C. Wheelchair Sports said in a statement that hiring the private fundraiser is both "valuable" and "cost-effective."

But some charities have found the expense of telemarketers like Xentel too high. After three years of using Xentel in its fundraising, the Vancouver Fire Fighters' Charitable Society stopped hiring the company, which had kept more than half the funds it raised. "We just said, 'We can't lend our name to this anymore,' " society director Al Gregory said. "The percentages are grossly in favour of the company and not the charity." Four other B.C. firefighters charities also told CBC News they stopped using Xentel to raise money on their behalf, citing high percentages kept by the company. The proportion of donations that Xentel retains is in line with the practices of some other private fundraising firms. The Voice of the Cerebral Palsied of Greater Vancouver hired the fundraiser ATS Marketing, which raised $128,943 in 2009 and kept $107,003 — or 83 per cent — of that money. The Cancer Survivors' Fund of Canada hired a fundraiser called Millennium, which has kept 91 per cent — almost $700,000 — of the money it raised for the fund in 2010. There are no rules in Canada about the fees a fundraising company can charge, but if you ask the fundraiser where your charitable donation goes, they're obligated to tell you.

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There are more than 85,000 charities registered with Canada Revenue Agency. All of them can issue tax receipts for the donations they solicit from you. Many of those charities are small, with limited staffs that rely on outside companies to do their fundraising. However, a CBC investigation has found that in some cases, external fundraising companies are billing charities for well over half the money they collect — and in some cases, more than 90 per cent. Over the past five years, external fundraisers in Canada have taken in more than $750 million. The database below was built from records supplied by the Canada Revenue Agency on charities that paid external fundraisers for their campaigns during 2008 and 2009.

Database: Charities that pay external fundraisers

Don Quixote Note: Only 1 Vernon Charity appears on the list. 12 Kelowna Charities were on list. 4 Penticton Charities on list. 5 Kamloops Charities on List.