Are You Giving to Charities, Or Telemarketing Companies?
“It’s like a betrayal,” Patterson says, sitting in her kitchen in June, after being shown copies of the North Carolina report and the contract the association signed with InfoCision. “I know I won’t donate again. It’s like they stabbed you in the back. It’s terribly wrong.”
Bloomberg has a pretty stunning report about the amount of money telemarketing companies that work on behalf of charities receive because of one-sided contracts. A telemarketer named Robin convinced 64-year-old Carol Patterson (quoted above) to reach out to 15 neighbors asking them to donate to the American Diabetes Association. A report shows that the telemarketing company, InfoCision, received nearly 80 percent of the money raised by donors—only 22 percent of the money raised went to the charity.
In another astonishing example, InfoCision gathered $5.3 million for The American Cancer Society in 2010, and then kept all of the money. And not only did Infocision keep 100 percent of the funds—it received $113,006 in fees from The American Cancer Society, which means the charity actually lost money. Charities that use these telemarketing companies say they sometimes have to use these “loss-leader” strategies to engage people over the long term, but that doesn’t make it sound like any less of a hustle. According to the report, telemarketers are often instructed to tell donors that a large percentage of the money will go directly to helping people—even if it’s untrue. This is making me think very hard about where I give, and how I give. [via]