You have just received a telephone call.  The caller says she is a member of your local law enforcement agency.  She goes on to say they are raising the funds necessary to buy bulletproof vests for all the agency's officers.  She then seeks a donation from you, promising a token gift for your generosity and support. 

You donate ten dollars, and receive a note of thanks and the promised decal, plastic coffee cup, or other inexpensive gift.  Assuming the caller actually represented your local law enforcement agency, and the agency received money, were you just swindled, or was this a legitimate business transaction?

If you classified this as a legitimate transaction, you are legally correct.  These fund-raising activities occur everyday and result in millions of dollars of donations to countless organizations.   

Now let’s examine what you and millions of others don’t know about some of these legitimate business practices.  The knowledge you gain might cause you to alter your perspective.

The person in our real life example is not a law enforcement officer.  She is an employee of a professional fund-raising company.  Of the money collected by this company, only twenty percent, or less, will ever reach the law enforcement agency.  That’s right, eighty percent or more of the donations are kept by the fundraiser to cover expenses and, of course, to turn a profit.  Now that you have just donated eight of your ten dollars to a fund-raising company, do you still believe you were not somehow deceived?

What, in truth, some of these fund-raisers have resorted to involves the use of omission lies.  They omit any facts that would cause you to bypass them.  Should that occur, and you donate directly to the agency, the fund-raiser would not make any money.

In comparison, let's look at another situation involving similar activities.

 Illegal Donations

One day, you suddenly decide to help a needy organization.  Perhaps it's a shelter for the homeless.  You don't have much money of your own, so you become a one-person fund-raising organization.

You draft, print and mail out hundreds of fund-raising letters.  You also make hundreds of telephone calls seeking donations from local citizens by telling them you represent the shelter for the homeless.  In all, you net over $50,000.  Of that $50,000, you give the shelter for the homeless $25,000.  The shelter thanks you for your donation, and a week later you are arrested and charged with theft by fraud.  Why? Because it's the law.

You, of course, were not hired by the shelter to raise funds on their behalf, and probably didn't mention to them how the money was raised.  You did, however, donate a greater percentage of the money than did the honest fund-raising organization cited in the previous example.

In both examples, lies of one form or another were used to deceive others for personal gain.  Some good also stemmed from both fund-raising activities because the officers got the bulletproof vests and the homeless received some needed clothing, food, and shelter.  It might be said that objectively no one was really harmed.

Another, less noted, difference between these two examples is that the honest business was incorporated, filed all the necessary legal papers, and worked out of an office.  They also kept records and paid the requisite taxes.  What professional con artists are fast learning is that fraud is much easier to commit when cloaked under the guise of being an honest business.  In other words, they use the law and its inherent loopholes to their advantage.

Alternative Donations

If you do not mind this arrangement, then by all means, donate to your hearts content. However, if you really want to be of help then why not give all the money to the charity of your choice? When next you receive a call soliciting your financial support, ask the caller if they are employed directly by the agency they claim to represent, or if they are a professional fund raising organization. Although this is not foolproof, most licensed agencies will, albeit grudgingly, admit they are fund raisers. Should they say otherwise, and be caught, then their agency will soon lose their license.  Once you have determined who the caller represents you can simply tell him or her that you will donate directly to the organization.

Top court considers fund-raising fraud 

By Anne Gearan
Associated Press writer

      WASHINGTON — The public should be protected from telemarketers who shade the truth about how much of your contribution really goes to charity, government lawyers told the Supreme Court.
      The court heard arguments Monday on what the government can do about charity fund-raisers who take most of the donations and turn over a small percentage for good works.
      Illinois, backed by 45 states and the federal government, says some such fund drives amount to fraud. Telemarketers and many large charities warn that their pitches are protected as free speech.
      "We ask this court not to hold that half-truths are constitutionally protected," Illinois Assistant Attorney General Richard Huszagh told the justices. His state wants to stop misleading sales pitches made by a professional fund-raising firm in the name of a Vietnam veterans' charity called VietNow.
      Telemarketing Associates Inc. took in more than $8 million on behalf of the veterans' charity, and pocketed 85 percent of the money. Better-known charities have taken pains to distance themselves from VietNow and its practices but still side with the charity and its fund-raiser in the Supreme Court case.
      Charities say potential donors would slam down the receiver if told upfront that a telemarketer would keep the overwhelming share of any contribution. The fees and overhead costs they charge simply are a cost of doing business, charities contend.                                         

Tuesday, March 4, 2003

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