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Summary of Results of Charitable Solicitation Campaigns Conducted by Commercial Fundraisers in Calendar Year 2014

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Summary of Results of Charitable Solicitation Campaigns Conducted by Commercial Fundraisers in Calendar Year 2014 SUMMARY OF RESULTS OF CHARITABLE SOLICITATION CAMPAIGNS CONDUCTED BY COMMERCIAL FUNDRAISERS IN CALENDAR YEAR 2014 KAMALA D. HARRIS Attorney General State of California SUMMARY OF RESULTS OF CHARITABLE SOLICITATION BY COMMERCIAL FUNDRAISERS FOR YEAR ENDING 2014 (Government Code § 12599) TABLE OF CONTENTS PAGES SUMMARY 1 - 4 TABLE SUBJECT/TITLE 1 ALPHABETICAL LISTING BY CHARITABLE ORGANIZATION 2 ALPHABETICAL LISTING BY COMMERCIAL FUNDRAISER 3 LISTING BY PERCENT TO CHARITY IN DESCENDING ORDER 4 THRIFT STORE OPERATIONS – GOODS PURCHASED FROM CHARITY 5 THRIFT STORE OPERATIONS – MANAGEMENT FEE/COMMISSION 6 VEHICLE DONATIONS – ALPHABETICAL BY CHARITABLE ORGANIZATION California Department of Justice November 2015 SUMMARY Every year Californians provide generous support to a wide array of charities, either directly or through commercial fundraisers that charities hire to solicit donations on their behalf. The term “commercial fundraiser” refers generally to a person or corporation that contracts with a charity, for compensation, to solicit funds. The commercial fundraiser charges either a flat fee or a percentage of the donations collected. By law, commercial fundraisers are required to register with the Attorney General’s Registry of Charitable Trusts and file a Notice of Intent before soliciting donations in California. For each solicitation campaign conducted, commercial fundraisers are then required to file annual financial disclosure reports that set forth total revenue and expenses incurred. This Summary Report is prepared from self-reported information contained in the annual financial disclosure reports filed by commercial fundraisers for 2014 and includes statistics for donations of both cash and used personal property (such as clothing and vehicles) for the benefit of charity. Only information from complete financial reports received before October 1, 2015 is included. Information from late, incomplete, or defective financial reports is not included in the Attorney General’s Summary. Tables 1, 2, and 3 provide information from reports submitted by commercial fundraisers that solicit donations via direct mail, telemarketing, auctions, and entertainment events. Tables 4, 5, and 6 provide information from reports submitted for thrift store operations and vehicle donation programs. It is important to note that most of the charities registered with the Attorney General’s Registry of Charitable Trusts do not use commercial fundraisers to raise funds. Historical figures show that a solicitation campaign conducted by a commercial fundraiser returns to the charity, on average, about 50 percent or less of the contributions received. The remainder is retained by the commercial fundraiser as fees and expense reimbursements. Comparison Figures for the Past Three Years of Reporting General Fundraising 2012 2013 2014 Total Revenue $294,278,385 $361,464,285 $687,719,087 Amount to Charity $108,624,208 $197,237,944 $371,900,722 Percent to Charity 36.91% 54.57% 54.08% Thrift Stores (Cost of Goods) Total Revenue $94,163,559 $106,104,807 $125,286,485 Amount to Charity $14,258,610 $ 14,032,828 $11,899,809 Percent to Charity 15.14% 13.23% 9.5% 1 Thrift Stores (Fee/Comm.) 2012 2013 2014 Total Revenue $4,326,447 $4,417,557 $4,267,853 Amount to Charity $170,590 $165,368 $156,445 Percent to Charity 3.94% 3.74% $3.67% Vehicle Donations Total Revenue $17,715,668 $13,403,593 $23,555,600 Amount to Charity $5,489,197 $6,785,789 $8,244,157 Percent to Charity 30.98% 50.63% 35.0% Description and Summary of Information in Tables 1, 2, and 3 • Information was obtained from 927 completed financial reports. • Commercial fundraisers collected approximately $687.7 million in charitable contributions in 2014, an increase of $326.3 million over the amount reported in 2013. • The distribution to charity in 2014 was approximately $371.9 million, an increase of approximately $174.7 million over the amount reported in 2013. • The average distribution to charity from all campaigns conducted by commercial fundraisers in 2014 was 54.08%, a slight decrease from the 2013 average of 54.57%. Overview of Thrift Store Operations and Vehicle Donation Programs Thrift stores handle what is known under state law as “salvageable personal property”. They may be operated directly by a charity or by a for-profit vendor. For-profit vendors are defined as commercial fundraisers if they (1) receive a management fee or commission from a charity for which they operate a thrift store or (2) purchase a majority of the goods sold from charities or social welfare organizations at negotiated prices. (Government Code, § 12599.) Charities that operate their own thrift stores incur overhead and other expenses associated with the operation of a retail store. After those expenses are paid, the earnings are used for such things as management expenses and charitable program services. Vehicle donation programs have become more popular over the past several years. These programs are administered either directly by charities, or by commercial fundraisers that solicit donations and manage the program on a charity’s behalf, in exchange for compensation. 2 The process of donating a vehicle usually begins when a donor contacts a charity or commercial fundraiser in response to a solicitation campaign. In the initial phone conversation, the donor will be asked questions about the vehicle. Generally, the vehicle will be accepted unless the cost of towing the vehicle exceeds its value. Donors are responsible for notifying the Department of Motor Vehicles of the transfer of registration. Failure to transfer registration has subjected many donors to subsequent penalties and expenses incurred after donation, most often as a result of parking violations. The donated vehicle is then sold and the proceeds are divided between the commercial fundraiser and the charity. Because all costs associated with advertising, towing, storing, and selling the vehicle are deducted from the proceeds before any distribution to charity, charities usually only receive a marginal amount from the car’s sales proceeds. Description and Summary of Information in Tables 4, 5, and 6 Table 4: Thrift Store Operations – Goods Purchased from Charity: This table lists, in alphabetical order, each charitable organization that solicited donations of used clothing and merchandise (“salvageable personal property”) and sold the property to a for-profit thrift store operator. The name of the for-profit store operator is also listed. (13 completed reports) Table 5: Thrift Store Operations – Management/Fee Commission: This table lists, in alphabetical order, each charitable organization that solicited donations of used clothing and merchandise and paid a management fee or commission to a for-profit thrift store operator. The name of the for-profit thrift store operator is also listed. (3 completed reports) Table 6: Vehicle Donation Program: This table lists, in alphabetical order, each charitable organization that solicited vehicles and paid a management fee or commission to a for-profit reseller. (367 completed reports) The data contained in these tables can be summarized as follows: • For-profit thrift store operators that purchased goods from charities reported total revenue of approximately $125.3 million for the 2014 reporting period. Of this amount, approximately $11.9 million, or 9.5%, was paid to charitable organizations. Total revenue decreased from 2013 by approximately $2.1 million, and the percent to charity decreased by 3.7%. • For-profit thrift store operators that were paid a fee or commission by charities reported total revenue of approximately $4.3 million for the 2014 reporting period, with approximately $156,000, or 3.67% paid to the charities. The percentage to charity decreased slightly from the 2013 figure of 3.74%. 3 • Total revenue for vehicle donations was approximately $23.5 million, with the charities receiving approximately $8.2 million, or 35% of this amount. The total revenue increased by approximately $10 million from 2013, while the percent to charity decreased by approximately 16%. The information in this summary is derived from unedited reports filed by charities and fundraisers. The filed reports should be consulted for more complete information regarding each solicitation campaign. This Summary Report and the annual financial reports filed by commercial fundraisers for each campaign are available on our website at http://oag.ca.gov/charities. The reports may also be viewed on a computer terminal located in the lobby of the Attorney General’s Registry of Charitable Trusts, at 1300 I Street, Sacramento. The Attorney General also publishes a Guide to Charitable Giving for Donors, which provides advice, guidelines and information to help donors in making decisions to give. The Guide is available on our website at http://oag.ca.gov/charities or may be viewed on the computer terminal located in the lobby of the Attorney General’s Registry of Charitable Trusts, at 1300 I Street, Sacramento. 4 TABLE 1 This table lists, in alphabetical order, each charitable organization that contracted with a commercial fundraiser to conduct one or more solicitation campaigns on its behalf. For each campaign, the table lists the name of the charity, name of the commercial fundraiser used, total revenue raised by the campaign, total revenue to charity, and percentage of revenue that the charity received. Note: Negative amounts in the ATo Charity@ column indicate the campaign raised less than the commercial fundraiser fee guaranteed in the contract between the charity and the fundraiser. Commercial Fundraisers Report Charity/Charitable Purpose with Commercial Fundraisers - 2014 Listing in Alphabetical Order by Charity Name Charity/Charitable Purpose Commercial Fundraiser Revenue To Charity % to Charity 18TH DISTRICT AMERICAN LEGION CONVENTION THE HERITAGE COMPANY, INC. 4,391.00 199.40 4.54 CORPORATION 2402 WILDWOOD AVE STE 500 5317 GOLDEN WEST AVE SHERWOOD AR 72120 TEMPLE CITY CA 91780 826LA OMAZE, INC. 37,218.94 25,817.01 69.37 1714 W. SUNSET BLVD. 326 INDIANA AVE UNIT B LOS ANGELES CA 90026 VENICE CA 90291 9TO5, WORKING WOMEN EDUCATION FUND HUDSON BAY COMPANY OF ILLINOIS, INC.
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