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Who Said Anything About Opposing Waste?

Aug 1, 2008
By .
Politics & Current Events

Our name is Citizens Against Government Waste. We support private waste, because private sector fatcats waste money with an efficiency far greater than any government fatcat could possibly match.

94 cents out of every dollar "collected" by fundraisers for Citizens Against Government Waste, America's "#1 taxpayer watchdog" and opponent of "wasteful pork barrel spending," goes not to the charity, but to the companies to which it has outsourced its fundraising:

Records filed with the California attorney general's office show that over the last decade, for-profit fundraisers for the nonprofit kept more than 94 cents of every donated dollar. Yet donors could write off the full contribution on their tax returns.

"It's a rip-off of the taxpayer," said Pablo Eisenberg, senior fellow at Georgetown Public Policy Institute and a philanthropy scholar.

It's a ripoff in every respect, not just of the tax dollars that could and should be assessed for this "charity's" wasteful fundraising, but to the more efficient charities that actually spend some of the money they collect on advocacy, lobbying, outreach, and teaching. I'm not entirely sure what those charities are in the field of opposing government waste (I donate to the Cato Institute now and then myself, but always directly), but even the government doesn't waste all but six cents out of every dollar it collects.

The efforts of Tom Schatz, the President of CAGW, to defend his charity's atrocious record are especially amusing though ludicrous:

Thomas Schatz, president of the Washington, D.C.-based group founded by industrialist J. Peter Grace and muckraking journalist Jack Anderson, defended its fundraising.

"The purpose of telemarketing is not always to 'come out ahead,' though that's always the goal, but to reinforce [donors] for the future," he said.

So your first time donors are loss leaders, as they'd say in the sector of the economy that pays taxes Mr. Schatz? As your actual donors, by far the majority of whom pay taxes on every dollar they earn would say? While your charity, which opposes it when the government fails to tell them where their money is going, pisses away 94% of what they donate to you?

But Citizens Against Government Waste is just the oh-so-ironic tip of the iceberg. The story names names (too few to be sure), and it's well worth reading, because some of the charities you think you're donating to when you're in fact lining the pockets of telemarketers will surprise, shock, and upset you.

When giving to charity, the golden rule is the same as it is any other market: caveat emptor. Research before giving.

Always remember, only the newly formed Popehat Foundation (to be announced in a forthcoming post) spends 100% of its donations on the intended objects of your goodwill.

Via Diana Hsieh.

Last 5 posts by Patrick

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2 Comments

  1. Ken  •  Aug 1, 2008 @1:28 pm

    "Ironic" is too tepid a word.

    "Citizens Against Government Waste" perhaps thinks that if those dollars were taxed, they would be wasted on the government, whereas if those dollars are given to Citizens Against Government Waste, they will be given to telemarketers, who will spend them productively on child pornography and snuff movies and psychotropic medication and whatever else telemarketers shop for.

  2. Eduardo  •  Aug 4, 2008 @1:02 pm

    While this is obviously a bad fund raising strategy, it isn't so unheard of to make a bad fund raising move.

    "In more than 5,800 campaigns on behalf of charities that were registered with the state attorney general from 1997 to 2006, the fundraisers reported taking in $2.6 billion. They kept nearly $1.4 billion — about 54 cents of every dollar raised."

    You know what this means? Find a new strategy. That's all. Telemarketing doesn't work, for the most part, and this is something I know first hand.

    You wouldn't see this article, however, exposing the wasteful direct mail industry, because that's all done in-house. You don't see them exposing grant-writing methods, or even consultants. And you know why? Because it isn't scandalous, and I can almost assure you that, when looking at total budgets for these nonprofits, fund raising and development will account for less than 20%. Which means that while the nonprofits employ a stupid practice, they aren't wasting ALL their tax-free money.

    There are a lot of reasons why the nonprofit model is broken and stupid, but fundraising is a pretty well regulated, albeit self-regulated, aspect of the nonprofit sector.

    If you do want to donate, I recommend looking up a nonprofit's 990 tax form on Guidestar.com. You'll also be able to see how much executives are paid.