Don’t Blithely Support Your Local Pitchman

People solicited by phone for charitable donations are often happy to give: It’s usually for the police or the sheriffs or someone helping them stamp out crime, or for needy children or sick people--worthy causes all, and often worthy groups. “The man who called was real polite and called me by name,” says one Hollywood housewife, “and he was a policeman, and it seemed legitimate. At least I assumed he was a policeman.”

Another Los Angeles citizen was recently offered tickets to a benefit by someone who called “for a police association, and I said which police, and he quickly mentioned several cities, including Culver City. He said they were funding programs to get kids off drugs, and I asked which programs, and he hung up.” In fact, the Culver City police have no current fund-raising effort.

Even when the pitch is legitimate--sanctioned by the group named--information may be scant. In previous years, when Culver City was seeking funds, and vigorously, some people were simply told that the funds were “to support the police.” Other police groups may “make representations that the money is going to help wives and orphans,” says Lt. John Ferguson, commanding officer of the Los Angeles Police Commission’s investigation division, “when it goes to (their association’s) union activities.”

Solicitors Misrepresent

The callers may also misrepresent who they are--often professional phone solicitors, who may represent themselves as actual members of the cited group--wheelchair vets or policemen, for example. At worst, they “don’t even have a charitable organization in mind: They just pick a sympathetic category, like the handicapped or the blind or missing kids,” says Bill Newsome, head of consumer fraud for the San Diego city attorney’s office.

Moreover, they may not reveal that the named organization gets only a cut of the take. The proceeds for an “annual benefit circus” for WeTIP (We Turn in Pushers) in Bakersfield last year were not just used, as the callers said, “to combat child and drug abuse and crimes of any nature” but to pay the promoter who made the calls. That promoter, along with several others, was sued by the Bakersfield city attorney for not disclosing the arrangement.

Some organizations, of course, do their own fund-raising, often with volunteers. Not uncommonly, others contract with companies that staff phone “boiler rooms” with paid solicitors, send runners to collect donations the same day and either deliver promised products or stage the promised benefit show. The organization named either gets a guaranteed flat fee or a percentage of the amount taken in--often 10%, with “20% the most generous I’ve seen,” says Ferguson.

Direct Donations

If they knew, solicited donors might prefer to send the entire amount to the given organization, so more of it could be used for charitable purposes or, given the arrangements, not to give at all. Indeed, under California’s charitable solicitation disclosure law, for one, a phone solicitor must say who he really is, provide a breakdown of how much of the donation will go to the named organization, to the fund-raiser and to fund-raising expenses, and say how much, if any, of the donation is tax-deductible.

“If they fail to make the required disclosure,” says Newsome, “there’s an implied representation that the entire amount goes to charity.”

Ironically, the very active police associations are sometimes thought safe from these rules because they’re more union than charity, at the same time that they’re successful in getting donations mainly because they imply wholly charitable intent.

Los Angeles has therefore just amended its municipal code specifically to require disclosures for any solicitations “on behalf of peace officers and fire fighter organizations,” charitable or not, as well as a 48-hour “cooling-off period” for donors, and a $5,000 bond from the promoter and $1,000 from each solicitor in case of any later-revealed misrepresentations.

Such regulations may not help consumers recognize out-and-out frauds--a recent solicitation in San Diego, for example, called “Hopes for the Handicapped,” described by Newsome as “basically just a phone room, run by a couple that made themselves rich. Occasionally they rounded up a few kids and took them to Sea World, but less than 1% went to any charitable purpose. We closed them down.”

But disclosure can “let people know who’s the most efficient fund-raiser and where they get their biggest tax deduction,” says Newsome. They may not get any tax deduction: Groups such as the police associations may be nonprofit and tax-exempt, but donations made to them may not be tax-deductible.

Tight disclosure laws may also force the benefiting groups to perform the same analysis: The base problem is that they may make no more inquiries than the consumer. “These paid fund-raisers mostly go to legitimate organizations,” says Newsome. “They say ‘I have the phones; if you let me use your name, I’ll give you 10%,’ and the organization figures it has nothing to lose.”

The Culver City police association, for example, got a very general accounting of each fund-raiser: In 1984, says association President Tim Lynn, they were told that about $100,000 was raised, of which the policemen got about 20%, and the promoter took 60% for overhead (solicitors, rent, telephone bills, runners), 10% for the benefit (a dinner dance for 800 people, with 25-piece orchestra and entertainer at a Marriott hotel ballroom) and 10% for his profit. “I’m content with it,” says Lynn, “because we had a guaranteed amount and because we knew what the show was.”

WeTIP doesn’t even exercise its contractual “auditing rights.” WeTIP officials don’t actually know the total money raised in that Bakersfield effort, or in several other fund-raisers run for them by the same promoter: They only know their guaranteed fee was $65,000 for benefits shows in four areas over one year, and they got it. WeTIP was told that the promoter lost money, that “Bakersfield and Fresno were not anti-crime enough to solicit for WeTIP,” says Miriam Eckert, WeTIP’s assistant national director.

In a way, it’s free money for such organizations: “All they have to do,” says Ferguson, “is let their good name be used.” Adds Terry Hilliard, executive vice president of the Better Business Bureau for Kern, Kings and Tulare counties, “If they want to sell their name cheap, that’s their right. But many people give because of their trust in the name of the group: Where’s the accountability to the public on this?”

To groups in need of funds, there’s a greater priority. “To tell you the truth,” says Lynn, “with as many problems as we fall into, I hate it, but you can’t get policemen to call.” “We spend 24 hours a day taking tips in this office,” says WeTIP’s Eckert. “We can’t be calling also to get funds. It distresses me to see this problem, because without this fund-raising, we wouldn’t survive.”