A piece of the action

From the Palm Beach Post-

Frank Cariello started the Veterans Charitable Foundation nine years ago after going with his World War II buddies to veterans' hospitals and seeing a need.

Concerned that a door-to-door fund-raising effort wouldn't pull in much money, Cariello of Boynton Beach hired telemarketers in Florida, and eventually in other parts of the country, who began dialing for dollars.

The strategy has paid off, but not for the veterans' hospitals that are supposed to benefit from Cariello's foundation.

Since 2000, telemarketers have reeled in nearly $833,000 in donations, close to $700,000 of which went right back into the coffers of those companies hired to rake in the dough, according to the organization's tax returns.

Outsourced fund-raising companies demonstrate a huge flaw in the world of giving. While many donors think their money is going to a good cause, only a fraction goes to the nonprofit. A large chunk actually lines the pockets of companies hired to raise money.

A boxing promoter, Cariello, 69, pulls no punches when it comes to defending his organization.

"It's the nature of the business," Cariello said. "The average person who gives $10 expects $9 to go to the VA, but if you use a telemarketer it doesn't work that way."

Cariello, who says he's operating in about a dozen states, including North Carolina, freely acknowledges that most of the deals he's signed with telemarketers around the country provide for an 85-15 split.

Add to that the money he puts out on marketing, overhead costs and the accountant he pays to file the organization's tax returns, and the VA gets pennies on the dollar.

Neither Cariello nor any of his board members take a salary, according to the organization's tax return.

I worked as a telemarketer for a week in 2006. It was quite an education. The 85-15 wasn't news to me, for the charities who I placed calls for, never got more than 20-25% and most less than that.

Never donate to a charity through a telemarketer. It's a waste of good money.

Disclosure- My employment as a telemarketer lasted just one week. I was released/fired for not raising enough donations.