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Gross Profit: Money Given to Clipboard Kids Rarely Makes It to Nonprofits 

Wednesday, Sep 28 2011

Most San Franciscans know this scene: A group of energetic young people with clipboards want your attention and money. Pedestrians walking past Sansome and Clay streets register the fluorescent shirt, the readiness to pounce, before the solicitor can get out her opening line: "Hi, sir! Do you support Planned Parenthood?" With three more girls in the same hot pink apparel blocking the walkway nearby, there's no sidestepping this solicitation. You might avert your eyes, answer a nonexistent phone call, or mutter an excuse: "Yes, I already do;" "Of course, but I'm in a hurry." And then there's always "No."

This work teaches you how to become numb to rejection. The canvasser, who introduces herself as Marquita Davis, dances in place, revving up for the next interaction. Showing no signs of wear and tear, upbeat and earnest, she is a poster child of do-goodism.

When Anastasia Petro takes the bait and stops, Davis launches into a cascade of facts about how Planned Parenthood has fought to retain its federal funding. It works. Petro gives what most people won't — her ear and $10. "My interest was sparked because Planned Parenthood has had funds cut," she says. "It seemed like a good cause."

If Davis can track down more Petros to donate a one-time gift, or perhaps $30 monthly, she might get to keep going another day.

Don't be fooled by her Planned Parenthood shirt or impassioned speech; Davis may look like a volunteer, but she is a paid solicitor with Grassroots Campaigns, Inc., a for-profit company that nonprofits pay millions of dollars to run expensive, nationwide fundraising drives on their behalf. Headquartered in Boston, GCI uses Craigslist, college outreach, and other forms of advertising to recruit idealistic teenagers and twenty-somethings who will take the long days in exchange for minimum wage, some commissions, and a platform to support liberal, progressive organizations — what the company refers to on its website as "good causes and candidates." This summer, GCI employees across the country also canvassed for the American Civil Liberties Union, Amnesty International USA, Freedom to Marry, and Save the Children.

Most people, like Petro, say Davis' breezy introduction that she is a "paid fundraiser for Grassroots Campaigns" — a disclosure that is required by law — does not resonate with them. Coupled with the Planned Parenthood insignia, "Grassroots Campaigns" does not connote for-profit fundraising. Because Davis does not elaborate, it's left to patrons to ask: How much of the donations will the charity receive and how much will GCI keep? The answer GCI provides time after time is that 100 percent of the money goes to the charity.

In fact, most of the nonprofits are expected to receive zero percent after expenses — as was the case eight out of nine times in California last year. GCI's charity clients rarely make any revenue during a campaign, and may not see returns for years down the line. Yet GCI and the charities it works for continue to defend the "100 percent goes to the nonprofit" claim. Under California law and according to the contracts between GCI and the charities, all of the money GCI collects must initially be placed in the nonprofit's custody. From that perspective, the charity does receive 100 percent of the money.

Just one small caveat people on the street never hear: GCI bills the charity, usually on a weekly basis, and that bill could total thousands of dollars. Telling people that 100 percent of their donations will go to the charity is akin to telling restaurant patrons that meals are free ... until the check arrives.

Fundraising regulators and experts call this tactic unethical, dishonest and an omission of material fact.

GCI, proponent of progressive candidates and organizations, has not embraced transparency as its governing philosophy. When questioned, most of the young hires could not and most of their superiors would not explain why they tell donors that the nonprofits get 100 percent of their money — which is only about 10 percent of the truth.

Each year, the California Attorney General's Registry of Charitable Trusts requires its 331 registered commercial fundraisers to submit information about every national campaign they conduct that concurrently runs within the state — detailing the amount of money raised, their own costs, and how much the charities received after expenses were deducted.

According to the state's most recent data from 2009, charities kept an average of 42 percent of the total funds raised by commercial fundraisers. Though GCI's 0 percent return rate is rare, the U.S. Supreme Court has ruled that state regulators cannot set arbitrary limits on costly fundraising. They can, however, insist that fundraising professionals divulge these expenses. Such is the case in California, where solicitors, if asked, must disclose the percentage of money the for-profit is expected to receive, based on the previous year's annual report.

Though the contracts between GCI and the charities vary, the nonprofits generally pay a set rate, and some pay the company an additional percentage-based bonus commission. According to the 2011 contract between GCI and the American Civil Liberties Union, the ACLU pays GCI a flat $180 for every canvasser per 4.5 hours.

People solicited on the street, however, would not know GCI is paid according to such contracts — even though California law prohibits commercial fundraisers from misrepresenting "directly or by implication" what the charity is expected to receive after fundraising costs have been subtracted. Legally, a misrepresentation "may be accomplished by words or conduct or failure to disclose a material fact." If asked, canvassers must immediately disclose what percentage of money will be spent on GCI's fundraising costs.

SF Weekly reporters posed the same question to 10 GCI canvassers: "How much of the donation will go to the charity?" Even when specifically asked how much money the charity would keep after GCI's bills, the canvassers gave the same answer: 100 percent. We asked them how this was possible, "if you are a 'paid fundraiser for Grassroots Campaigns.'" They floundered for an answer.

About The Author

Taylor Friedman


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