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Telemarketer for Firefighters Charity Keeps 75% of Donations

   Jul 23, 2021

CharityWatch Executive Director, Laurie Styron, was recently contacted by Patrick Nelson of KOAA News5 Colorado in response to a tip from a viewer asking about a telemarketing call he received. On the other end of the line was a fundraiser asking for donations to the Colorado State Firefighters Foundation (CSFFF). Nelson and Styron proceeded to investigate. What they uncovered should be a cautionary tale for donors.

According to solicitation campaign reports filed with the Colorado Secretary of State (CO SOS) by CSFFF's fundraiser, P.B. Entertainment, the fundraiser is entitled to keep 74% of the gross donations raised during the contract period 5/1/2021 through 8/1/2026. This marks a slight improvement from a prior period, 7/16/2018 through 7/16/2019, for which the fundraiser reports receiving 80% of gross donations raised on behalf of CSFFF. Solicitation notices for campaigns conducted between 7/16/2019 and 7/16/2021 yielded 75% to the fundraiser and 25% to the charity, according to solicitation campaign reports filed with the CO SOS for those periods. 

CharityWatch is often asked by donors if a particular charity is a "scam." While this is a good starter question, the answer won't help donors judge whether a particular charity is worthy of their donations. A charity may be properly registered with its home state, with the IRS, and submit annual tax filings, but this is no guarantee that it is operating efficiently or effectively.

The Colorado State Firefighters Foundation is a registered 501(c)(3) public charity. It shares a president with a related 501(c)(4) social welfare organization, Colorado State Firefighters Association (CSFFA), according to the nonprofits' IRS tax Forms 990 for 2018 and 2019, respectively. CSFFF's vice president is a board member of CSFFA, and CSFFA's vice president is a board member of CSFFF. CSFFA's board secretary is a board member of CSFFF. Both nonprofits are historically very small, raising less than $100,000 in gross contributions according to the tax forms cited above. This appears to have changed in more recent years. A "Solicitation Campaign Financial Report" filed by CSFFF with the CO SOS on 7/29/2020 reflects that during the period 7/16/2019 through 7/15/2020, P.B. Entertainment raised $352,355.27 on the charity's behalf. Of this amount, "Net Proceeds To Charity" amounted to only $87,606.52, according to the Report.  

CSFFF gets points for honesty by reporting on its own website that P.B. Entertainment keeps the majority of the donations it collects on the charity's behalf. According to the website:

"The Colorado State Fire Fighters Foundation (CSFFF) is performing a telemarketing campaign to raise funds for downed firefighters and families, future firefighter training and education scholarships, and to support training at the annual CSFFA Fire College.  

These phone calls are from the PB Entertainment group based in Memphis Tennessee. The callers are paid solicitors for the CSFFF and the foundation receives 25% of these donations."

But the charity loses points by presenting a false binary that suggests that its fundraising expenses would be just as high or higher if it raised donations in-house, stating: "If we as an organization were to try to perform this marketing campaign on our own, we would make less than 25% due to expenses for support staff, payroll, facilities, call lists, benefits and other set expenses." CharityWatch disagrees that only two options exist for a charity to raise funds and that both are inherently highly inefficient. CharityWatch assigns top ratings to hundreds of charities that are able to keep their fundraising expenses at 25% or less of donations raised. In addition, helping firefighters is a popular cause that many donors are enthusiastic to support. Charities raising donations for popular causes are often able to maintain lower fundraising ratios as compared to charities with unpopular causes that struggle to find a high volume of supporters. 

In an interview with Patrick Nelson of KOAA News5 Colorado, CharityWatch Executive Director, Laurie Styron, gave the following advice to donors receiving charity telemarketing calls:

"'It's not unusual to see the professional fundraiser under contract be allowed to keep 60%, 70%, 80%, 90%, of what you donate before whatever is left of your donation ever even gets to the charity,' Styron said."

"'You really need to before the fact, before you hand your money over, do a little research and make sure the charity you are donating to is going to use your contribution efficiently and effectively,' said Styron."