Fundraisers outearn charities: CBC probe

Hundreds of millions of dollars are going to fundraising companies instead of charities, a nationwide investigation by the CBC News Investigative Unit has found.

In Edmonton, the investigation found that some high-profile charities spend far more on fundraising activities than they do on charity work.

The Edmonton Oilers Community Foundation grossed more than $8.5 million in 2008,Canada Revenue Agencydocuments show. Butthe foundation spent more than $7.9 million on fundraising expenses.

Documents show the Misericordia Hospital Foundation grossed more than $6.3 million in 2008 and spent nearly $5.3 million on fundraising.

Both foundations declined interview requests.

'One of the impacts is that a charity is measured more by its popularity and brand awareness than helping Canadians in need.' Kate Bahen of Charity Intelligence Canada

Large amounts being paid to professional fundraisers are skewing charitable activities,says Kate Bahen,managing director of Charity Intelligence Canada, a non-profit organization that helps donors make informed decisions.

"One of the impacts is that a charity is measured more by its popularity and brand awareness than helping Canadians in need," Bahen told CBC. "What is going to get donors to open their wallets is based on marketing, not on the charity's results."

One Edmonton charity has ended its use of expensive external fundraisers. Teren Clarke of the Alberta branch of the Canadian Paraplegic Association said it came down to being honest with the public.

"We wanted to be able to be transparent, in terms of what is the cost of raising that dollar, and if the costs are really high then our board has made the decision that it's just not worth it," Clarke said.

Bahen rejects the suggestion that the government should pass legislation to stop charities from spending the majority of their income on fundraising.

"I think the power lies with Canadian donors," Bahen said. "It's our money, it's our choice, and money talks. And if we can start making informed giving decisions not making our giving decisions based on marketing I think we can change the trend in this sector."