Private Company Keeps 80% of Some Charity Donations

**Anchor Bar** · February-23-11, 08:46 PM

http://www.wxyz.com/dpp/news/local_n...ans-charities-

Has anybody heard of Associated Community Services? It says they're located in Southfield.

**Anchor Bar** · February-25-11, 05:51 AM

take a look at the complete story.

http://www.wxyz.com/dpp/news/local_n...ren%27s-groups

**Crystal** · February-25-11, 06:42 AM

Shame on the IRS for granting these so-called charities a 501[[c)[[3) status. I get phone calls all the time from charities whose names sound similar. An online search almost always reveals that the so-called charity spends 80% or greater of its revenue on fund raising and administrative costs.

I hardly make any cash donations anymore because I don't have time to check out the so-called charity making the request.

**sirrealone** · February-25-11, 07:26 AM

The WXYZ story mentioned Charity Navigator. Their website is one that I have always used to check on whether a charity is actually doing what they are supposed to. I'll only donate to four or five star charities. I looked up the Leukemia one that they mentioned and it has a two star rating.

Giving is still very important. I don't think we should throw the baby out with the bathwater and stop giving because there are needs and worthwhile causes out there. I think the first flag has to be to not donate based on a cold call.

**belleislerunner** · February-25-11, 07:37 AM

Isn't this firm hired by the charities themselves to raise money? The charities and the Company would then negotiate what price will be passed on to the charities. Many charities have cut back on their in house fundraising staff - so rather than get 0 in fundraising - are happy to get 20%. The difference goes to employee costs etc of the professional fund raising business. If you want the most bang for your money to go to a specific charity - always give directly to the charity and skip the middle man [[e.g. United Way). This is just an added revenue enhancement for charities to get money that otherwise may have passed them by. Overly sensational reporting by WXYZ to stir an emotional response. But no news to report.

**sirrealone** · February-25-11, 07:44 AM

If a charity has resigned itself to being happy with 20 cents on each donated dollar, then they should cease operations because that's way beyond not even giving a darn.

**daddeeo** · February-25-11, 09:10 AM

I believe it's called the trickle down effect.

**Anchor Bar** · February-25-11, 09:14 AM

[QUOTE=belleislerunner;226252]Isn't this firm hired by the charities themselves to raise money? The charities and the Company would then negotiate what price will be passed on to the charities. Many charities have cut back on their in house fundraising staff - so rather than get 0 in fundraising - are happy to get 20%. The difference goes to employee costs etc of the professional fund raising business. If you want the most bang for your money to go to a specific charity - always give directly to the charity and skip the middle man [[e.g. United Way). This is just an added revenue enhancement for charities to get money that otherwise may have passed them by. Overly sensational reporting by WXYZ to stir an emotional response. But no news to report.[/QUOTE]

Someone doesn't know what the words sensational or news mean. If yout don't think donors would like to know that 82 cents of every dollar they donate goes to someone else, them you must shred your tax refund from the feds.

**wolverine** · February-25-11, 09:24 AM

My friend has been asking me and others occasionally by email to assist him in raising funds for a charity. I just looked them up on the website provided. While 75% of the funds actually go towards the cause [[which isn't too bad), I didn't like the fact that your personal information will be released to other charities. I'll pass on a donation. Sorry, I'd like to keep that info private and not get harassed.

**belleislerunner** · February-25-11, 10:01 AM

If a donor wants to know what percentage goes to charity - that donor has the responsibility to ask the person or do the research. Maybe WXYZ should do a story on how Art Van and jewelry stores mark up their inventory 100's of percent from cost. Or how casinos odds aren't in your favor. Or the odds of winning the lottery are 1 in 150 million. It's called business.

**Crystal** · February-25-11, 11:14 AM

My apologies for my sour sounding post. The callers asking for donations often falsely thank us for past donations [[that did not take place), and give misleading or false information about their organization.

sirrealone makes good points, and Charity Navigator is an excellent resource.

**rb336** · February-25-11, 12:00 PM

Originally Posted by belleislerunner

If a donor wants to know what percentage goes to charity - that donor has the responsibility to ask the person or do the research. Maybe WXYZ should do a story on how Art Van and jewelry stores mark up their inventory 100's of percent from cost. Or how casinos odds aren't in your favor. Or the odds of winning the lottery are 1 in 150 million. It's called business.

exactly. business, not charity

**kraig** · February-25-11, 12:25 PM

Originally Posted by Crystal

Shame on the IRS for granting these so-called charities a 501[[c)[[3) status. I get phone calls all the time from charities whose names sound similar. An online search almost always reveals that the so-called charity spends 80% or greater of its revenue on fund raising and administrative costs.

I hardly make any cash donations anymore because I don't have time to check out the so-called charity making the request.

The charities have 501c3 status. But what about the companies that help raise money for the charities? Is ACS considered a 501c3 or are they a tax paying business? If they have to pay taxes on the money they raise that could make a world of difference.

**belleislerunner** · February-25-11, 01:31 PM

They are registered as a "Domestic Profit Corporation" in Michigan so would pay taxes etc on their revenue [[as opposed to a charity). From the Mich website "Domestic profit corporations are formed for the purpose of generating profit for shareholders. Profit corporations may be formed in Michigan under the Michigan Business Corporation Act for any lawful purpose". I've never heard of this Company until this story. My guess is they never claim to be a charity but are calling "on behalf" of the American Cancer Society etc... Wordsmithing and less than Puritan ethnical standards perhaps - but illegal - hardly.

http://www.dleg.state.mi.us/bcs_corp...ERVICES,%20INC

**Gistok** · February-25-11, 02:01 PM

Originally Posted by daddeeo

I believe it's called the trickle down effect.

LOL.... with the key word being "trickle"...

**kraig** · February-25-11, 04:04 PM

Originally Posted by belleislerunner

They are registered as a "Domestic Profit Corporation" in Michigan so would pay taxes etc on their revenue [[as opposed to a charity). From the Mich website "Domestic profit corporations are formed for the purpose of generating profit for shareholders. Profit corporations may be formed in Michigan under the Michigan Business Corporation Act for any lawful purpose". I've never heard of this Company until this story. My guess is they never claim to be a charity but are calling "on behalf" of the American Cancer Society etc... Wordsmithing and less than Puritan ethnical standards perhaps - but illegal - hardly.

http://www.dleg.state.mi.us/bcs_corp...ERVICES,%20INC

Thanks, that was very informative.

**Scottathew** · February-25-11, 04:16 PM

What a rip-off. I'm sure they don't mention that only 20% of the donation will make it to the charity, because no one would donate knowing that.

**Anchor Bar** · February-25-11, 04:22 PM

Neither Art Van nor any jewelry store is a 501c3 non- profit charity, set up to fulfill a worthy purpose like buying wigs for kids who have gone through chemo, or helping buy medical supplies for the needy. So your comparison here is way off. The money at stake here could be used to fulfill the charitable purpose. At a jewelry store, there is no purpose other than profit.

This story did not say anything done here was illegal. Clearly, it is not. It exposed how charities are losing out on, in some cases, almost every penny that the charitable public gives. Instead of helping the needy--as donors believe they are when they donate--they are helping a for profit company they've never heard of.

**kraig** · February-25-11, 04:39 PM

I think this teaches all of us to be a bit more aware of how we send in our donations.

**Crystal** · February-25-11, 05:30 PM

Anchor Bar expresses my thoughts perfectly. Legal or not, it's a deceitful and unethical way of doing business. In my opinion the charity itself is a front for ACS. I understand that you often have to "spend money to make money", but this is ridiculous.

**Scottathew** · February-25-11, 07:08 PM

Originally Posted by Crystal

Anchor Bar expresses my thoughts perfectly. Legal or not, it's a deceitful and unethical way of doing business. In my opinion the charity itself is a front for ACS. I understand that you often have to "spend money to make money", but this is ridiculous.

Yup. I would like to see a law passed that forces companies like these to state the exact amount that will actually go to the charity.

"Mr. Smith, before you make your donation I would like to let you know that $16 will go to my company, and $4 will go to the American Red Cross. Are you still interested in making this donation?"