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Denny's Daily Zinger: Two Kinds of Charities: Good & Bad

February 14, 2014 By Denny Hatch
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Here's a sleazeball scenario.

Contemplate this only somewhat fictitious example: A "charity" is created to educate the public about the common cold. It hires a professional fundraiser to conduct a direct mail campaign to raise money. (Telemarketing can be easily substituted for direct mail here.) The direct mail copy provides a statistic on how many people annually catch a cold and includes the following tips on how to avoid it: Wear a hat, eat soup and avoid people who sneeze.

Three years of nationwide mailings produce $10 million in contributions. The professional fundraiser bills the charity for $9.75 million. The remaining $250,000 is consumed primarily by the executive director's salary. The charity's management determines that the mailing had a dual purpose of soliciting money and educating the public about the common cold. Thus, on its annual report (and its Internal revenue Service Form 990) 50 percent of the $9.75 million that was paid to the fund raiser can be counted as a program expense because the charity says it educates the public. Not a bad percentage for a "start-up" charity. But what exactly is the benefit to society that makes this charity worthy of donor support and tax exemption?
Clarine Nardi Riddle, Connecticut Attorney General

   "The Chronicle of Philanthropy, January 9,1990

Where to Find Good Charities
My advice: Connect with Charity Navigator
 
The mission: separate the good guys from the bad guys.

[See the illustrations in the media player at right for a sampling.]

Denny Hatch is the author of six books on marketing and four novels, and is a direct marketing writer, designer and consultant. His next book will be "Write Everything Right!" Visit him at dennyhatch.com or contact him at dennyhatch@yahoo.com.


 

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