Where Does Your Over-the-Phone Charitable Donation Go?

By Erin Jordan, Reporter


By Aaron Hepker

CEDAR RAPIDS, Iowa — Special Olympics Iowa is known for hosting sporting events for thousands of children and adults with mental disabilities. Those events cost money, which Special Olympics raises, in part, through telemarketers.

A KCRG-TV9 and Gazette investigation revealed that Special Olympics Iowa got just 12.5 percent of money raised through magazines sold by DialAmerica Marketing Co.

The rest of the money — more than $840,000 in two years — went to the New Jersey telemarketer.

“I think that’s ridiculous,” said Tiffany Williams, of Marion, who works with Special Olympics athletes through her job at Discovery Living. “I mean, 12 cents out of every dollar? That’s pennies. That’s nothing.”

The KCRG-TV9 and Gazette investigation showed that Iowa charities — on average — receive about 22 cents of each dollar raised on their behalf by telemarketers who sell products and ask for donations.

Special Olympics Iowa earns even less than average on its deal with DialAmerica.

Mark Reed, director and CEO of Special Olympics Iowa, said donors know how much of their money is going to the charity. “They tell them very clearly up front that if they would like to purchase a magazine, that 12 ½ cents out of every dollar of the magazine subscription cost will go to Special Olympics,” Reed said. Two telemarketing firms bring in about 13 percent of the yearly budget for Special Olympics Iowa, Reed said.

The Heritage Co., an Arkansas telemarketer that also makes calls for Special Olympics Iowa, was fined $15,000 last year by Iowa’s Attorney General for misleading comments made during solicitations to Iowans. None of the nine phone calls recorded by the state were made on behalf of Special Olympics Iowa and Reed stands by the fundraiser they have worked with for 20 years.

Heritage kept 52.4 percent of $454,712 it raised on behalf of Special Olympics in the year that ended May 31, 2010.

Telemarketing supplements other fundraisers including special events and online donations.

“There’s no way we could, as a small staff, be able to reach almost 800,000 people a year in Iowa without having some of these outreach programs that we have,” Reed said.

Carol Mann, of Cedar Rapids, said she wishes Special Olympics Iowa would try to get a bigger cut from telemarketers so there could be more programming for athletes like her son, Joshua, 17. “It would give them maybe an opportunity to offer some other programs that either they haven’t had an opportunity to offer before or that maybe they had to cut and could bring back,” Mann said.

The extra money could also cover travel costs for Special Olympics athletes, Williams said. “It’s not like Special Olympics comes up with money for everything,” Williams said. Athletes “have to provide their own lunches, they have to provide their own hotel stay, things like that, so 12 cents of every dollar doesn’t cut it.”

Reed said Special Olympics Iowa is open to better deals. “As we look at renegotiating our contracts for the future, we may look at other vendors. I mean, we’re not suggesting if there is a better deal we aren’t interested in doing it,” Reed said. “We want to get the best return on our investment we possibly can.”

Special Olympics Iowa -- Dial America

Special Olympics Iowa -- Heritage

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