The Goldie Company was invited by the CBC to be interviewed in regards to their investigative report on September 22nd concerning the use of external telemarketing experts and the high fundraising costs of a number of charitable organizations in Canada.
The vast majority of charitable organizations respect the norms established by the Canada Revenue Agency, and use donor contributions with the utmost respect. As a consulting firm that specializes in philanthropic management, we would like to point out that:
- Over 85,000 organizations are recognized as charitable organizations in Canada;
- The Canada Revenue Agency states that charities cannot have fundraising costs over 35% of their revenues;
- If between 2004 and 2008 $762 million was spent on external fundraisers, particularly for telemarketing services, this represents only 2% of $35 billion in revenue generated by charitable organizations in Canada during that period;
- Only 200 out of 85,000 organizations, or 0.2% of charitable organizations had fundraising costs that exceeded 50% of their revenues – and these organizations warrant an automatic revue by the Canada Revenue Agency, who has the power to address the abuses and revoke the organization’s charitable status;
The philanthropic management sector has greatly evolved over the last few years towards a greater standard of professionalism. Most charitable organizations generate substantial fundraising activity that cannot be supported solely by volunteers and must include paid professionals to accomplish their mission. If our organizations warrant sound management, the professionals that work for them warrant competitive salaries – based on their competencies and experience – like in any other sector.
Charitable organizations must develop their philanthropic market using a plethora of methods available. Some of these fundraising strategies carry relatively high costs, such as direct mail, telemarketing, and special events. Lower cost initiatives include in person solicitation, major campaigns, major gifts and planned giving (life insurance and bequests). A well-planned use of a combination of these methods allows charitable organizations to acquire new donors, gift renewals, develop new fundraising programs and raise awareness of the organization. Organizations that rely solely on the most expensive methods of fundraising risk surpassing the norms established by the Canada Revenue Agency.
The Goldie Company offers consulting services that focus on the development of major capital campaigns, major gifts and planned giving. We follow the strictest ethical norms developed for the fundraising sector. We have developed our own Standards of Professional Ethics and also adhere to the ethical norms as developed by the Association of Fundraising Professionals and Imagine Canada. These norms prohibit commission-based or percentage-based compensation.