Pretty Expensive Overhead

According to a special investigative report in the Los Angles Times, for-profit fundraising businesses kept 35% of donations received by the Jewish Federation of Greater Los Angeles.

A comprehensive review of state records filed over a decade, indicates the problem of paltry returns extends well beyond what has been reported in recent years among benevolent societies for police, firefighters and veterans. It affects charities large and small, well-known and obscure.

The data analyzed included all commercial fundraising campaigns reported to the California Attorney General’s office from 1997 through 2006, excluding those involving thrift store sales or vehicle donations. The data cover both California-specific efforts and national campaigns that included solicitations within California.

But depending on who you compare them to, Federation really didn’t do so bad. Take a look at some prominent Jewish organizations to see how they stack up:

On the side of really poor return to the organization:

  • B’nai B’rith received 38.4%
  • American Jewish Committee 36.4%
  • Anti-Defamation League Of B’nai B’rith 28.6%
  • World Jewish Congress 22.0 %
  • More than one synagogue did a lot worse

And some Jewish communal groups get a star:

  • UJC received 97% of monies raised
  • The URJ received 90%
  • New Israel Fund received 81%
  • Hillel received 77%

There are a lot more Jewish non-profits listed; you can search the data base here.

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  1. Official American Jewish Committee (AJC) Response:

    Pretty Expensive Overhead completely misleads American Jewish Committee donors into thinking that the majority of their contributions go to for-profit fundraising businesses and not for the AJC programs and activities they are seeking to support. Nothing could be further from the truth.

    The three telemarketing firms listed were utilized by AJC from 2004-2006. What is not explained, however, is that the gross revenue and net returns posted represent the total dollars these firms raised nationally, not specifically for the state of California.

    Even more significant is the fact that the use of these telemarketing services represents an inconsequential portion of AJC’s national fundraising program and a minuscule percentage of our expenses.

    In 2006, as noted in our Annual Report, AJC’s total support and revenue was $69,860,000. Our telemarketing expenses that same year were $42,582 (Donor Services Group was used in 2005, not 2006 as reported). That represents less than seven hundredths of one percent.

    In total, our public support accounted for 89.1 percent of our income, and 80.8 percent of our expenses went directly to program services. Only 8.4 percent of the total income was applied to fundraising expenses. These numbers are, in fact, quite exceptional, and are comparable for 2004, 2005 and 2007.

    AJC is proud of our well-earned reputation for proactive fiscal responsibility and cost effectiveness. We are regularly listed, and continue to move up, in the Chronicle of Philanthropy’s Top 400.

    Three other independent charity watchdog organizations – the American Institute of Philanthropy, Forbes Annual Survey, and Charity Navigator – give us consistently high marks year after year.

    In fact, for the third consecutive year Charity Navigator gave us their highest four-star rating stating that AJC “outperforms most charities in America in its efforts to operate in the most fiscally responsible way possible. This exceptional designation…differentiates AJC from its peers and demonstrates to the public it is worthy of their trust.”

    The trust and loyalty of AJC donors is paramount to us. AJC works every day to ensure that every dollar donated is well spent for the purposes for which it was intended.

  2. Where the data we used came from:,0,7128706.htmlstory

    About the data: Data analyzed for this report included all commercial fundraising campaigns reported to the state from 1997 through 2006, excluding those involving thrift store sales or vehicle donations. The data cover both California-specific efforts and national campaigns that included solicitations within California. They do not cover fundraising by charities’ in-house solicitors. These data may contain filing errors by fundraisers, or recording errors by the state. However, spot checks of records from other states showed substantial consistency with California results. In a few cases, fundraising data for directly affiliated groups operating out of the same location were combined.

    Sources: California Attorney General


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