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BY JEFF PORTER
ARKANSAS DEMOCRAT-GAZETTE
Any given day, they're begging for money, selling
magazines or pushing concert tickets. Those working for Arkansas charities
bring in $16,149 a day in the name of benevolence. But the charities themselves
will get just $3,851.
They're called paid solicitors. Nonprofit organizations
that hire them -- from the Special Olympics to the Arkansas Professional
Firefighters -- see them as a vital way to raise money. Others see them
as an easy way to mislead charitable givers.
Their methods vary.
Offering contributors bumper stickers or advertising
space, they've raised $6.8 million in the name of the Arkansas State Police
Association over the past four years. The association has gotten $1.8 million
-- 26 cents on the dollar.
Since 1997, telemarketers offering such incentives
as B.J. Thomas concert tickets have raised $604,674 for the Little Rock
and North Little Rock Firefighters Association. The firefighters have gotten
$102,895 of that -- 17 cents on the dollar.
Gorgas Vending of El Reno, Okla., works for the
Arc of Arkansas, which has served mentally retarded people for years. Gorgas
places gum ball machines, which display the Arc logo, in stores and restaurants.
Since 1987, it has taken $427,164 out of the machines. The Arc has gotten
$44,054 -- 10 cents on the dollar.
No wonder paid solicitors have received some bad
press in recent years.
Several states report telemarketers' activities
every year, noting that, often, mere pennies of every dollar wind up in
a charity's pocket.
Arkansas Attorney General Mark Pryor, whose agency
regulates paid solicitors and charities, issued a report last month covering
promotions ending since 1996. The report, he says, is meant not to discourage
donations but to inform contributors where their money goes.
"The donor has the right to know," Pryor says.
All told, paid solicitors raised $760 million in
Arkansas during the years covered by the report. Many were working for
charities based outside the state, like the American Diabetes Association
or Greenpeace. Those working for charities based in Arkansas collected
$24 million. They passed on less than a third of that, $7 million, to the
charities.
But the charities are generally comfortable with
that.
Take the State Police Association, which has raised
more money through paid solicitors in the past four years than any other
Arkansas charity. Roger Perry, a state police corporal and president of
the association, says the $1.8 million it has received comes with little
risk.
"We pay nothing for it," he says.
To Pryor, "that doesn't sound like a good response."
As a donor himself, he wants a high percentage of his dollar going to the
charity. "That's a personal call that the donor has to make," he says.
The State Police Association contracts with two
telemarketers. Telcom Enterprises of Birmingham, Ala., raised $3.5 million.
Brent-Wyatt West of Tempe, Ariz., markets and prints the association's
quarterly magazine, The Arkansas Trooper. It raised $3.3 million,
mostly through selling ads.
The association has used both companies for more
than a decade. The latest contract with Telcom owner Thomas Oser runs through
the middle of 2002. Telcom sets up an Arkansas office, hires the telemarketers
and pays for the phone lines.
At one time, the association considered doing the
work itself, but quickly changed its mind. "You wouldn't believe how much
money it would cost," Perry says.
State Sen. Mike Everett, D-Marked Tree, who has
criticized telemarketers for years, looks at it differently. He thinks
some charities are simply too lazy to raise the money themselves.
Not every fund-raising drive involves a paid solicitor.
Colleges and universities often use student volunteers to man the phone
banks. Girl Scouts, aside from inexpensive prizes, aren't paid to sell
cookies. Hospitals and museums often use their own employees to raise money.
Everett believes some solicitors, using emotional
appeals and dodging questions about who gets most of the money, are intentionally
misleading. He has written Col. Tom Mars, the state police director, to
complain about the association's solicitors.
The problem, Mars says, is that the association
has become dependent on telemarketers. Mars himself has complained about
the association's bumper sticker, which used the state police logo. The
stickers were redesigned.
In October, Mars, who isn't a member of the association,
was involved in the incorporation of the nonprofit Arkansas State Police
Foundation. Unlike the association, the foundation will be able to offer
tax deductions to its donors. Once the foundation is active, Mars says,
it can help pay for the association's charitable work and eventually allow
it to stop using telemarketers.
Meanwhile, telemarketers keep calling. And if they
tell the truth, Everett says, few people would give.
What is the truth?
Arkansas law requires that if the donor asks, the
paid solicitor must tell how much goes to the charity. Reputable charities,
experts say, are glad to provide any reasonable information the donor wants.
"The unfortunate fact is that most donors don't
ask enough before they give," says Bennett Weiner, vice president and director
of the Better Business Bureau's Philanthropic Advisory Service.
Charities are required to file copies of their tax
returns with the attorney general's office.
How does the State Police Association spend the
money it gets?
Its 1998 return shows that it spent $395,073 providing
dental, vision and life insurance to more than 600 police officers. It
spent $156,858 on programs such as Cops for Kids, which supports athletic
programs and sends children to camp. It provided the 200 teddy bears --
with little hats and badges -- that troopers handed out last week at the
Arkansas Children's Hospital.
Firefighters, too, are big customers of solicitors.
The Little Rock and North Little Rock Firefighters
Association has used Gehl Corp. of Fort Lauderdale, Fla. The association's
president, Little Rock firefighter Ed Jaros, says his group uses the money
it gets to train firefighters and to help burn victims.
In 1994, Gehl gave its callers this script to use
if someone asked how their donation would be spent.
"You make your check directly payable to the Little
Rock and North Little Rock Firefighters Association. 100% of the funds
are deposited into the operating account. The firefighters association
receives the lion's share of the fund we raise. So may we count on you?
We'd sure appreciate it."
Since 1997, that lion's share has amounted to 17
percent.
Again, though, Gehl took care of all expenses. Its
1998 report shows that it collected $248,298 in the name of the Little
Rock and North Little Rock Firefighters Association. It spent $189,977
on such things as payroll, postage and telephone. It gave $52,080 to the
firefighters. According to its report, that left just $6,241 for Gehl.
Still, Jaros says, his association is rethinking
its use of the telemarketers. More people have Caller ID and are simply
not answering when telemarketers call, and those who do answer are becoming
leery of what they hear.
Len Wolstenholme, a spokesman for Xentel Inc. of
Toronto, Canada, which recently bought Gehl, was one of the few telemarketers
to return a telephone call.
Yes, he says, the industry has been hit by complaints,
fair and unfair, over the past few years.
Indeed, almost everyone interviewed talks about
dishonest, misleading or rude charity telemarketers. Pryor says his Consumer
Protection Division gets more telephone-related complaints than any other
type. "Telemarketing is leading the pack," he says.
Arkansas law now allows people to pay a $10 fee
and be placed on a list of people that most telemarketers aren't allowed
to call. More than 14,000 have signed up.
Other states, too, have tightened their laws.
"We don't have a problem with that," Wolstenholme
says. "We're quite comfortable with that."
But no law can think for someone, he says; it's
up to the consumer to ask the questions. "If you do that before you write
the check or get out your credit card, then likely you'll make intelligent
decisions."
Special Olympics Arkansas, a well-known organization
that provides sports training and competition to mentally retarded people,
is the second-biggest customer of paid solicitors among state charities.
Its telemarketers have been both praised and sued by Arkansas attorneys
general.
One of them, Olympia Publishing of Little Rock,
seeks volunteers and donations, and sells advertising in Special Olympics
yearbooks. Since 1996, it has raised $1.6 million, passing on $396,016
-- 24 percent -- to the Special Olympics.
This year, instead of a commission, Olympia will
be getting $27 an hour. So the next set of numbers might look different.
Olympia also does marketing for businesses and political
campaigns, and Pryor says it is a good example for the industry, training
its employees on how to deal with donors' questions.
"We operate by the rules," Olympia President Don
McGilvray says. "We answer those questions directly and honestly." He says
most telemarketers "are ordinary, decent, hard-working taxpaying citizens."
Another Special Olympics telemarketer, DialAmerica
Marketing Inc. of New Jersey, was sued by Pryor's predecessor, Winston
Bryant, because it hadn't registered with the state.
Bryant contended in 1993 that DialAmerica ran a
"boiler room," where callers under high pressure pitched magazine subscriptions.
In return for allowing DialAmerica to use its name in sales pitches, Special
Olympics Arkansas received 12.5 percent of the proceeds.
Initially, DialAmerica claimed that it wasn't required
to register because it was simply selling magazines, not seeking gifts.
But in 1995, it settled with the state for $10,000 -- half of which went
to the Special Olympics. It is now registered with the attorney general's
office.
Bobby Doyle, executive director of Special Olympics
Arkansas, says telemarketing is just one way the organization raises money.
It profits from golf tournaments, silent auctions, corporate gifts. This
month, a group of people including Doyle took part in the Polar Bear Plunge,
jumping into a lake in North Little Rock. The event made $23,000 for the
Special Olympics.
But the telemarketing is important, Doyle says,
because it reaches a large pool of potential donors.
Pryor's office, the Better Business Bureau and the
Federal Trade Commission all offer advice on what to do when the telephone
rings and the telemarketer starts his charity spiel. But they agree the
burden is on the donor to dig for the information.
"To give away money is an easy matter. ... But to
decide to whom to give it and how large and when, and for what purposes
and how, is neither in every man's power nor an easy matter."
The philosopher Aristotle said that more than 2,300
years ago.
This article was published on Sunday, December 24, 2000