Full Report on 283 Charities Available at http://www.sos.state.ga.us/securities/uncharitable_charities_2003

Secretary Cox Cites 11 Uncharitable Charities For High Fundraising
Costs & Low Percentage of Funds Devoted to Charitable Programs

ATLANTA … Secretary of State Cathy Cox today identified 11 charitable organizations that solicited funds in Georgia during 2002 and 2003 as Uncharitable Charities for the small percentage of dollars collected in solicitation campaigns that went to the organization’s charitable purpose.  The 2003 Uncharitable list is comprised of registered charitable organizations that conducted charitable fundraising campaigns using a paid solicitor, that filed financial campaign reports between Nov. 1, 2002 and Oct. 31, 2003, that raised over $100,000 in their campaigns and that directed 15% or less of the total proceeds to the charitable organization.

Each year Secretary Cox releases the Uncharitable list to focus public attention on the high fundraising expenses incurred by some charitable organizations.  Release of the list also serves to acquaint Georgians with the full range of detailed information about solicitation campaigns available on the Secretary of State’s website.

For 2003, the organization over the $100,000 threshold with the highest percentage of proceeds that went to fundraising costs (and the lowest percentage that was retained by the charity) was the Heritage Foundation, which incurred fundraising expenses of over 95 percent of the total of over $713,000 raised.  Following the Heritage Foundation on the list is, in order, the Catholic Medical Mission Board, the Southeastern Paralyzed Veterans Association, the National Association of Police Athletic Leagues, the Committee For Missing Children, the American Association of University Women, the Georgia Junior Chamber of Commerce, the Vietnam Veterans Foundation of Georgia, the Little Heroes Foundation, the Georgia State Lodge Fraternal Order of Police and the Professional Fire Fighters of Georgia.

The number of organizations included on the 2003 Uncharitable list fell by nearly one-half from the previous year.  In 2002, using the same criteria, some 19 charities received the designation.  In addition, the 2002 report spotlighted two charitable campaigns in which fundraising costs actually exceeded the total amount received in donations.  This year, no charity over the $100,000 threshold was shown as spending more on fundraising costs than was collected from donors.

“It’s encouraging to see that the number of charities with substantial donations and very high fundraising expenses has been reduced since last year, and we hope that greater public attention to this issue is prompting charities to exercise more care about the amount they spend on outside fundraising expenses,” said Secretary Cox.  “Nevertheless, our new Uncharitable report makes clear that there are still many charities that incur extremely high fundraising costs while carrying out their solicitation campaigns.  That is one reason it is so important for generous Georgians to take the time to review our data, and other resources available online, to get a clear picture of where their charitable dollars are going,” said Secretary Cox.

Ms. Cox noted that the reports on solicitation campaigns provide one important part of the overall financial picture of registered charities, but other measures should be considered as well.  In some cases, charities with relatively low overall operational expenses undertake an individual solicitation campaign that incurs very high fundraising costs.

The list contains only those charitable organizations which use paid solicitors and file reports at the conclusion of their campaigns.  Georgia law exempts certain charities, such as religious organizations and educational institution-related organizations, from filing requirements.  If a solicitor for an exempt organization filed a report during the period, that data is included in the tables, but they were excluded from the Uncharitable listing.

At the positive end of the spectrum, of the 283 organizations listed in the full report of charitable campaigns, five reported programs in which 90 percent or more of the funds were retained by the charity.  The five organizations with the lowest fundraising expense percentages were: Groundspring.org, The Leukemia and Lymphoma Society, the American Red Cross, the Defenders of Wildlife and the Jewish Federation of Greater Atlanta.

Complete data on the list of Uncharitable Charities, and all solicitation campaign reports filed during the period, can be found at the Georgia Secretary of State’s website.  The database includes amounts raised both inside and outside of Georgia.  For charities that conducted multiple campaigns during the period, their financial results are aggregated.

In a number of landmark cases courts have ruled that states may not restrict or place caps on the amounts charities can spend for fundraising or other administrative costs.   Charitable entities can be required, however, to disclose to regulators and to the public financial information about their operations and solicitation programs.

The 2003 database includes only the unaudited reports of solicitation campaigns submitted by paid solicitors to the Secretary of State’s office. These campaigns constitute just one aspect of the fundraising activities of each charitable organization. The percentage of funds each charity spends for fundraising, rather than programs, in its overall budget may vary significantly from the percentages reflected in these campaign reports. If a charity does not employ a paid solicitor, campaign reports are not required and their information will not appear in the database. However, prospective donors may also review financial information filed by all 2,320 charitable organizations registered in Georgia at the Georgia Secretary of State’s website.

A number of charitable enterprises are exempt from state regulation. Religious organizations, nonprofit educational institutions and their affiliated organizations   are not required to register or file reports with the Secretary of State. 

The Secretary of State’s office is authorized to enforce civil penalties, including fines, against organizations that do not adhere to the statutory reporting requirements.  The new report also includes 22 organizations that conducted campaigns during the period and have not, as of today, completed their required filings.