Last Friday, I got to be interviewed by WGN Radio’s Bill Leff
We talked about the Tampa Bay report on the 50 Worst Charities and how donors can protect themselves.
We also engaged in a little friendly Stanley Cup smack talk. 🙂
You can hear the 10 minute interview on the WGN Radio site or listen to it here:
The transcript of Bill Leff interviewing Fundraising Coach Marc A. Pitman on WGN Radio, June 14, 2013
In case you’d prefer to read the interview, here’s the transcript
Bill Leff: Let’s now talk to Marc Pitman. Marc is The Fundraiser Coach. Not “a” fundraiser coach, “the” fundraiser coach. Let’s talk about charitable donations.
How are you Marc? Nice to talk to you.
Marc: You know, I was doing really well until I got on the air and heard all this Blackhawk talk.
Bill: Why do you say that?
Marc: As a Boston guy – about if Crawford had been pulled [in Game 1]? That might have been a good thing. That might’ve been a benefit.
Bill: You would’ve been okay with that? Are you a Bruins fan?
Marc: Well yeah. I’m a situational fan, because I grew up in Red Sox nation, so I know that I just cheer for the Boston teams whether they’re doing badly or not, and they’ll probably let us down. But the Bruins, I was really gutting it out all three overtimes the other night.
Bill: You know what: I said this to Dave, who you were just hearing a second ago. I said this to Dave yesterday, if there was any doubt about this team among Blackhawk fans, is this the best team we’re going to play in the Stanley Cup Finals? All those concerns were quickly melting away because the Bruins brought their game; they looked fantastic.
Marc: It was a fun game to watch. My wife is saying this all the time – we don’t normally watch sports much, but she said, “It was just a gorgeous game” to watch.
Bill: It was.
Marc: People really – they both brought their game and you can see why they both made it to the Stanley Cup Finals.
Bill: Yup. And because of the hour time difference, I wish you had called me up Marc and told me how it ended, because you got to find out an hour before me didn’t you? I’m not good with time.
Marc: Actually, a full confession: I went to bed. Hey, we had that power play going into the third overtime….
Bill: I know.
Marc: How could we blow that?
Bill: I know. I know. The five on three, I know.
All right, let us, if you wouldn’t mind talk about the charitable donations, which is why we brought you here. Here’s a concern, and I know you hear this all the time, Marc. People say, “I want to give money.”
Something terrible has happened somewhere in the country or somewhere in the world, and “I want so badly to help. I want to send some money, but my main concern is the right amount of money won’t go to that charity.” You hear this all the time. What’s going on with that?
Marc: Isn’t it awful?
Marc: Ever since the beginning of, I guess humanity; there have been people that want to take advantage of our instincts to do good and toward it. I think part of what inspired this call – did you see that list from Tampa?
Bill: I did.
Marc: The Nation’s 50 Worst Charities.
Marc: It just kills people like me because you know that the people that are raising – I was just looking at the financials for The Kid’s Networks, one of the scams – seventeen million dollars and you know that they’re preying on your grandmother and your great-aunt, who’s just sitting at home trying to do the right thing and sending in their checks because they keep getting letters in the mail. It’s awful.
Bill: I’ve heard people with saltier tongues than me say that there’s a special place in hell reserved for people that would do this. That would prey on people, because you’re really doing two different people a disservice. You’re stealing money from people who think they’re giving to a good cause, and you’re also kind of besmirching the name of whoever has just gone through something terrible.
Marc: Totally true, especially when you see disaster reliefs. It’s amazing to me how they name these organizations. The creativity that we’re funneled for good would be powerful, because they’ll take any disaster relief and then they’ll create their own little charity. Even in Haiti, Wyclef Jean seemed to maybe do that because his charity doesn’t seem to have given out much money.
It’s almost like they’ll the Red Cross, which is a wonderful disaster relief organization and they’ll call some of themselves the Red Crutch. Then they’ll set up a boiler room and just start raking in money. But there are ways that donors can help avoid that.
I guess the good news is, if there’s a silver lining with these bad apples, is there’s a few – especially in our internet age, there’s a few things that donors can do to help avoid getting sucked into scams, and that’s what excites me.
Bill: Let’s do this, Marc, if you wouldn’t mind in a moment we’ll come back and talk about some of those ways. Because really, if you have it in your heart to give to a charity, the last thing you want to worry about is the right of money going, if at all, going to the charity that it is intended to go to.
Marc Pitman is joining us, the Fundraiser Coach. We’ll talk more in just a little bit. This is WGN.
Bill: It is Bill Leff with you on WGN, Jonathan Brammer is going to make his way in, in about 10 minutes. My guest is Marc Pitman, the Fundraising Coach. His website is www.fundraisingcoach.com. His book is Ask Without Fear. We’re talking about how you know if your charitable donation is going to the charity in which it’s intended.
A little while ago Marc, you brought up an article; a really, really nice expose that was written in the Tampa Bay Times about just this. They say in there, they’re talking about some of the worse charities in America. They tell the story of the Kid’s Wish Network, which over the years has raised $110 million dollars, and of that $100 million, they have given $4.8 million to charities and the rest they have kept. This is roughly three cents on the dollar. How do they get away with this?
Marc: Well I think it’s because of a couple of things, and one of them is in the article, that the regulators that cite them; there’s no-teeth for the regulations, so when they’re fined, they’re only fined a few hundred dollars.
Bill: So they could certainly afford it.
Marc: It’s a great “investment.”
Bill: Yeah, it’s a great investment.
Marc: They still get to keep 10’s of millions of dollars.
Bill: Don’t you have to apply to get some sort of a license to be a recognized charity. And how is somebody giving them a license with these sort of results?
Marc: Well, I think part of what we need to remember is these are outliers. I’m not at all, at all advocating what they do but we have over a million and a half charities in the United States alone. Over the last eight years there has been 700 or 800 new 501(c)3 charities approved by the IRS.
Another statistic: with 10,000 boomers reaching retirement age every day, there’s more and more people looking at “what’s the second half going to be like? What am I going to do with the rest of my life? What’s my meaning, what’s my legacy?” So there’s going to be more and more charities. I don’t even know what the decimal point of $1.5 million versus 50 is, but these are the really bad extremes.
Having said that, I think part of it is the regulation and the oversight. The states are swamped, and I think donors aren’t necessarily doing the due diligence that they should. One of the first things I tell donors is “don’t give money over the phone.”
Bill: As a rule, if somebody calls you up and says, “Look, there’s been a disaster and we’re putting together a fund to help the families.” If it’s over the phone you say, “Stay away.”
Marc: It seems almost like having those e-mails from your long lost Nigerian prince relative. Yes, I would say stay away. Send me something in the mail, or go to a reputable site. There’s a lot of good disaster relief organizations out there.
In fact, I was just learning with the Chronicle of Philanthropy, I think was reporting with the last disaster with the tornado area – or it was Tess Vigeland and NPR was saying gift cards are the way to go.
If you can mail gift cards to organizations, that’s easier to get into peoples’ hands than cash. We have a tendency, as Americans to think clothes and food, which is sometimes the last thing people need. They need diapers, they don’t need food.
So gift cards allow the organizations to actually use it for donors, so you know that it’s going to go over into the victim’s hands. It also gives you some sense of control over that.
Bill: It’s funny you say that about food because I think most of us would just have a natural inclination to think whenever something bad goes on, “I’ve got to send them food because the grocery stores have been decimated. I’m going to send some food and it’s going to help people.” But I’ve seen announcements several times of late where they say, “Please no more food. We can’t take food.” Or toys, I see also. “Don’t send kids anymore toys, we’re filled up with those.”
Marc: Doctors Without Borders is one of the organizations that, as a fundraising guy I totally admire. Because in the Haiti they ended up – remember them saying, “Please stop sending us money.”
Bill: Yeah, how about that. Stop sending us money. How does that happen?
Marc: Well because when you designate a gift to a disaster relief, technically it’s supposed to stay in that fund. You put that string attached to it so they can’t use it for anything else but those reliefs, and they knew they’re planning enough to be able to say, “Okay, there’s no way we can take more for this. If you’d like to give to our other stuff we’re doing around the world we’d love that, but please stop.”
I think that was one of the best pieces of charity-related media that could ever come because forever, I’ll be talking about how they were saying, “Please don’t send us any money.”
But what donors can do – have you heard of www.guidestar.org?
Bill: I have not. What is Guidestar.org?
Marc: All the charities that are past the IRS scrutiny of becoming a 501c3, even though we’ve called that into question already this morning, have to report on their finances every year. Guidestar.org collects all of those. They’re called the 990 that the charity puts out. It shows what their fundraising expenses are, it shows what their program expenses are, it shows what the top salaries of their top employees are, or the top five officers or employees.
There’s a ton of information on the web. I just pulled up the Kid’s Wish Network; I think that’s the one in Florida.
Bill: It is.
Marc: Yeah, it’s all here. It’s stuff here. And it’s not necessarily the easiest to read, but even on the first page, you can see that they raised a ton of money and they spend over 50% of that in fundraising expenses, and so I’m not a big advocate of seeing a hard and fast overhead percentage, but that should be a red flag. If that much money is going out, you need to look a little further.
Is it systemic? Are they spending a lot of money on outside things that aren’t cause-related, or is it strategic? If it’s strategic, just like a business, non-profits need to grow. So there are times that they’re going to invest more heavily in marketing and in fundraising so that they have the lifelong donors that they’re going to establish from that.
Bill: Marc, I know that there’s always going to be overhead costs for anything like this, but is there some sort of a safe standard? Is it 5 percent, is it 10 percent? What should the overhead costs be for any given charity? Is it a certain number?
Marc: Yeah. This is where I don’t like those rating organizations like charity watchdog groups that say, “Well overhead should never be more than 35% or 10% or whatever,” because it changes. It’s harder, especially in cash drought times, like now where we have the talent that’s coming into the non-profit space is extremely sophisticated and can command a good salary, and organizations need that kind of a skill level. So it’s a very complicated one.
I’ve heard a lot of people say 35% and I’ve heard other things. But then that forces charities into this weird accounting thing of, “Well that’s not overhead. Those employees over there aren’t overhead because they’re actually doing mission, so we’re going to count them as program cost, not as administrative costs.” It somewhat becomes an accounting shell game then.
Bill: It’s deceiving. It is.
Marc: Yeah, it’s sort of like sick days. Are you really sick or is it a mental health day? How do you account for those sick days that you take when you’re an employee?
Bill: You can’t. You can’t.
That is Marc Pitman, The Fundraising Coach. His website is www.fundraisingcoach.com. His book is Ask Without Fear. His hockey team is the Boston Bruins. Marc, I hope your team comes in a very close second place. Is that fair?
Marc: And I hope you’re wrong.
Bill: All right, we’ll see what happens. Marc, thanks very much. I hope you have a great Father’s Day. Thanks for joining us.
Marc: Thank you!