AOL?The New Spam/Scam Playpen
Around that time, the network of WHO'S MAILING WHAT! correspondents began forwarding me mailings from more than a dozen animal activist groups begging for money to save the elephants from extinction.
After a great deal of research, I discovered what these groups were doing with the donors' money to save elephants.
They were pocketing the money.
The more I got into the business of fundraising, the more I discovered that unless you delve deeply into the finances, the work and the methodology of individual nonprofits, chances are good that you'll be fleeced.
The announcement by AOL and Yahoo that they are going to start charging e-postage to bulk mailers that allows them to bypass Spam filters resulted in an outcry of horror from liberal and conservative organizations from MoveOn to Gun Owners of America, as well as readers of this publication.
In a knee-jerk reaction to the criticism, AOL announced that nonprofits will not have to pay the e-postage that will be charged to other bulk mailers.
By allowing nonprofits to bypass its Spam filters and enter members' in-boxes with an imprimatur, AOL is setting up its membership for the fleecing of the century.
How Mail Order Charities Can Work
From the Jan. 9, 1990, edition of the Chronicle of Philanthropy by Connecticut Attorney General Clarine Nardi Riddle:
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?