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]

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