Charity Donations Down By $26 Million In North Carolina

A just released 2007-2008 North Carolina Secretary of State Charitable Solicitation Licensing Division Annual Report states that charities licensed by the State collected almost $26 million less this year than in 2006-2007.
New statistics indicate that the generosity of North Carolinians is indeed being challenged by a tough economy. However, one bright silver lining to that news is that non-profit groups are getting more use from the dollars donated by the public.
Perhaps equally importantly though, the report shows that charities actually netted a dramatically larger amount of each donated dollar from professional fund-raising campaigns conducted this past year. This change did offset the decline in giving for the year.
The annual report specifically examines charitable groups that choose to use paid solicitors registered with the Secretary of State's Office. Data in the report breaks down how much of each dollar given by the public is used for fund-raising costs.
"First, we are very pleased to see that a high percentage of each dollar going to the non-profits is actually going for the purposes people think about when they give," Secretary of State Elaine F. Marshall said Wednesday as the report was released.
"In fact," Secretary Marshall said, "this year's percentage is the highest any of us ever recall seeing. That is very good news."
Secretary Marshall added though that the decline in overall giving could not be ignored. "We have to be honest about what this economy is doing to people's pocketbooks-North Carolinians always want to help charitable causes, but people are having to tighten their purse strings now," she said. "Non-profits out there know that and most charitable groups are facing a difficult 2009 because of it."
The report covers the time frame from July 1, 2007 through June 30, 2008. Gross receipts in that period from "events," meaning any kind of fund-raising campaign conducted by a paid solicitor and covered by the State's charitable solicitation law, totaled $239,111,162.59. That compares to a 2006-2007 figure $264,997,561.11.
On an overall percentage basis, fund-raising companies took a much smaller bite out of each dollar raised. Last year's report showed that an average of 50.54 cents of every dollar raised went to actual charitable services.
This year's report found that an average of 59.78 cents of every dollar went to actual services, with 40.22 cents of each dollar going to fund-raising and other expenditures. This means that the charitable organizations listed in the report netted a total increase of just over $9 million more than last year.
Organizations in the report netted a total of $133,930,092.18 in 2006-2007. The new report shows them netting a total of $142,940,674.05.
"This is the second year in a row that we have seen non-profits increase their percentages in these fund-raising arrangements,"
Secretary Marshall said. "It may be that charitable organizations are learning to negotiate contracts with fund-raisers that give them better guaranteed percentages. I think we all recognize that the public does want to see good numbers in order to keep supporting specific organizations."
The amounts organizations netted from campaigns conducted by a fund raiser ranged from 0 percent, meaning that they did not net any of the money raised, to 100 percent, meaning that all of the money raised actually went to the organization.
Marshall urged North Carolinians to use the information located at the Department's website to make smart choices when giving. "You can go to www.sosnc.com and click on the 'Check Before You Write One' icon and find all kinds of information about charities and fund-raisers operating in North Carolina and read what kind of questions to ask before you write that check," Marshall said.
The Secretary of State's Office licenses charities and non-profit organizations that use professional fund-raising services for their solicitation campaigns, compensate their officers, or that raise at least $25,000 and are not exempt from state law for reasons such as being a religious institution or volunteer fire department or educational institution.
Many charities in the state are covered by these exemptions, so the report does not reflect their fund-raising or spending activities. The Department also regulates professional fund-raising companies that solicit donations from the public on behalf of charitable groups.
Marshall also cautioned people not to automatically condemn a charity and its professional solicitor for low numbers in the report. "Sometimes extensive educational efforts are an integral part of their fund-raising program as well, but that's counted as part of the expenses," Marshall said. "Also, the Annual Report reporting date may come at the beginning of a fund-raising cycle when expenses are high but not much money has been raised," she said. "In those cases when more funds are raised with low overhead, that money is counted in the next report."
Many charities raise money on their own in addition to the amount they get through a professional, she added. Donors should look at the annual reports the charities file over a multi-year period, Marshall said, to get a true picture of their relationships with solicitors. In addition, donors may request financial information directly from the charity.
"The bottom line is, if you see something in the report that disturbs you about a charity you support," Marshall added, "first get more information about what happened, and then decide if you feel they have earned your continued support."
Marshall noted the Secretary of State's report covers only a segment of charitable efforts in North Carolina as many organizations are exempt or do not hire professional solicitors.
She also noted that the dollar numbers listed in the report in some cases include monies raised in other states as well. They are included in the State report because raising donations in North Carolina was a part of that specific multi-state, fund-raising campaign covered by law.
People with questions about individual charities or charitable solicitation activities in general can call the Secretary of State's Office, Charitable Solicitation Licensing Division at 1-888-830-4989 (toll-free in North Carolina) or 1-919-807-2214.