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Charities give, hope to receive

The address labels and other small gifts charities send out are an inefficient way to raise money, some watchdogs say.

By SUSAN TAYLOR MARTIN, Times Senior Correspondent
Published December 13, 2005

[Times photo: Willie J. Allen Jr.]
Pens, address labels and wrapping paper are among the items charities send to potential donors, aiming to coax a contribution.

If you're like many Americans, you might open your mailbox this holiday season to find:

Wrapping paper and gift tags from Save the Children.

A tree ornament from Habitat for Humanity.

Greeting cards and memo pads from the American Lung Association.

And personalized address labels from the National Wildlife Federation.

Hey, wait a minute! Aren't we the ones who are supposed to be giving, not the charities? And what are we supposed to do with all this stuff anyway?

"People feel guilty about receiving something they didn't pay for so they send in a couple of dollars," says Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog organization.

"It's actually an inefficient way to raise money - when you look at the cost of buying the person's name, the cost of mailing and the cost of the little gift, it really eats into the money available for programs and services."

Borochoff says recipients are under no legal obligation to pay for or return unsolicited "premiums" from charities. Nor should they feel guilty about using gift wrap, Christmas seals and the like if they don't make a donation.

"If I happen to be able to use it, I would use it and feel no qualms about not sending money, knowing the efficiency and accountability of some of these (charities) is so low," Borochoff says. "But how many mailing labels and key chains do I really need?"

Another watchdog group, Charity Navigator, says those who donate token amounts - usually out of a sense of obligation - may unwittingly set themselves up for even more solicitations.

"The smaller your donation, the more likely a charity will sell your name - they never sell the names of high-end donors," says Sandra Miniutti, a Charity Navigator spokeswoman.

The competition for donor dollars is especially strong this year because billions already have gone to victims of Hurricane Katrina and the Asian tsunami. But while the gifts and trinkets seem to get more elaborate every year, the practice is by no means new.

"Charities do it to set them apart from others - that was the initial strategy but now pretty much everybody has gotten into the game, especially when it comes to address labels," Miniutti says. "I think we've all been inundated with them."

Among the first charities to use small gifts as a fundraising tool was St. Joseph's Indian School in South Dakota. The coed school, home to 200 American Indian children, began mailing out handmade necklaces and other trinkets in the 1930s after a series of fires ravaged the campus.

This year, St. Joseph's is sending thousands of potential donors a "holiday gift box" - ribbon and bows, gift tags, ink pen, wrapping paper and 12 Christmas cards, complete with envelopes.

Such premiums helped the school raise nearly $40-million last year, much of it in small donations. But spokeswoman Amy Blum says St. Joseph's also relies on the sale of its mailing list to other charities.

"The list is vital - it keeps us in operation," Blum says. "It's fair to say that sharing the list is important to keeping our costs down."

As a private religious organization, St. Joseph's doesn't have to submit financial statements to the IRS as other nonprofits are required to do. However, the school sends everyone on its mailing list an annual report. Last year's showed that $3 of every $4 went for programs - an amount that watchdog groups consider a sign of efficient fundraising.

"A good benchmark is that 75 percent of a charity's expenses should be invested back in programs and services," says Miniutti of Charity Navigator.

The National Wildlife Federation, on the other hand, is probably an example of a charity that shouldn't be spending money on premiums like plush toy bears, Miniutti says. It gets a "poor" rating because its revenues and program expenses have declined.

"Clearly, that hasn't been an effective fundraising technique for this charity because it hasn't brought in more revenue over time," Miniutti says of the gifts. "Of course, donors could decide that the charity really needs their support now, but we think there's an indication of risk."

(The federation takes issue with its low rating, but says it has an "aggressive agenda" to fund and expand its programs.)

The goal of all charities is to "move people up the donor pyramid" so they contribute ever larger amounts, says Paulette Maehara, president of the 27,000-member Association of Fundraising Professionals. Someone who starts out sending a few bucks in exchange for a pen, calendar or memo pad might one day bequeath a fortune, or so the hope goes.

Maehara says donors can have a greater impact contributing to a few charities rather than spreading their money thinly among many. "Sit down with the family and decide what things are important. Maybe it's cancer research because someone in the family has had cancer."

Still, Maehara doesn't doubt that many donors will continue sending charities a dollar or two, if only because they like having an endless supply of mailing labels. She never uses any charity premiums unless she makes a donation. "I'd feel guilty about it. I won't even let my husband do it."

TIPS FOR SMART CHARITABLE GIVING:

--Narrow your giving to the causes or organizations most important to you - a $50 donation to one charity can have a greater impact than $5 to 10 different ones.

--Make sure the charity spends most of its money on programs and services, not on fundraising. Charity Navigator - www.charitynavigator.org - shows financial information for 5,000 charities. The American Institute of Philanthropy also lists top-rated charities on its Web site - www.charitywatch.org

--If you don't want to be deluged with appeals, check to see if the charity has a "donor privacy" policy under which it agrees not to sell or trade your personal or contact information. Some charities don't automatically protect you, but require you to tell the charity to remove you from mailing lists they sell or share.

--Susan Taylor Martin can be contacted at susan@sptimes.com

[Last modified December 13, 2005, 07:06:05]


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