Writing in failedmessiah.com about the ‘pay to play’ culture prevalent in some communities,  Shmarya Rosenberg shows how $1000. in contributions can net the organization almost nothing:

I just spoke with a collector who told me that for the past 15 years or so, many cities’ beit din or va’ad charges money to collectors for a letter that grants permission to the collectors to collect charity in their particular town or community. This can range from the Va’ad of Rabbonim of Queeens, which charges $25 for this service, to the Los Angeles Va’ad of Tzedaka (the name may have changed recently), which charges more than $100. The letters are good for 10 days to 3 weeks, depending on the city.

This collector also tells me that these va’ads, beit dins and rabbis often claim they are charging the collectors a “processing fee.”

In some cities people commonly give collectors checks made out to the local va’ad or Agudath Israel of that city or another organization. Before the collector leaves town, he presents those checks to the va’ad or organization, which then gives the collector a check for the total amount less 10%, which the va’ad or organization keeps for itself.

A few smaller communities still do not charge collectors.

Out of town collectors also often have pay drivers who guide them and take them to the homes and businesses of Jews who may donate. Many of those drivers take 1/3 of the money collected. Others charge per hour.

A collector who raises $1000 (all in checks) over a two day period in a city that charges $100 for a permit letter and which encourages residents to make collectors’ checks payable to the va’ad, beit din or organization issuing the letter returns home with very little money.

• $100 goes to the va’ad for the permit letter
• $100 goes to the va’ad for their cut of money raised
• $333 goes to the driver/guide

That leaves $467.

If the town does not have free accommodations for the collector, he’ll have to pay for two nights in a motel or hotel in or near the Jewish community. So subtract another $150 including tax.

That leaves $317.

If just over half goes to the charity the collector is raising money for, that leaves $158 for the collector for two days work – $79 per day.

And if no one invites the collector to stay for a meal, the cost of buying prepared kosher food further cuts down earnings.

The collector also has to pay for transportation to the city and from it.

All this keeps many collectors poor and brings the charities they raise money for much less money than otherwise would be the case.