Posts Tagged ‘SD&A’

SPLC — 2019 Telemarketing Scam

March 15, 2019

The Southern Poverty Law Center released their tax return for FY 2018 last week, and to no one’s surprise, the cash is still pouring in.

While donations dropped by 8% without a Charlottesville to exploit, this merely means that the company only raked in $111 million, rather than 2017’s record-setting bloat of $132 million. Remember, the company’s pre-Trump take averaged around $50 million a year.

So, not only did the SPLC declare a “non-profit” of $47,004,865, its cash-on-hand Endowment Fund now stands at $471 million, 98% of which is designated as “unrestricted” in use.

The Southern Poverty Law Center now sits high atop assets of $518,251,510, as in more than half a BILLION tax-free dollars.

At least a small part of last year’s “non-profit” came in the form of first time donors responding to donation pitches from paid, third-party telemarketers. And, as we have been reporting for several years now, the telemarketers cost the SPLC significantly more to hire than they take in for the SPLC.

And as usual, the first time donors and thousands of long-time donors end up holding the bag for the losses.

2019 Telemarketer Scam

As Page 38 of the Form 990 indicates, four third-party telemarketers divvied up every last dime given by first-time donors over the phone, as well as another $603,913 from the existing donor pot.

Grassroots Campaigns was the big winner, yet again, and we’ll come back to them shortly, but first a review of the other players, in descending order of avarice:

Harris Marketing Group is the most generous of the telemarketers by far, as it only keeps 48% of the donations it takes in for the SPLC.

Telefund, which takes the silver medal, pockets 94% of the donations it raises.

SD&A is a new-comer to the event, taking in 112% of the money it raises to “fight hate.” Not bad work, if you can get it.

Which brings us back to Grassroots Campaigns. These guys are always the big winner because they charge a fixed fee up front, regardless of how much the raise in the SPLC’s name. The shortage is always in the hundreds of thousands of dollars. Donations go directly to Grassroots, who then pass it along to the SPLC or their other non-profit clients.

The sheer genius of this strategy, as SFWeekly reported in 2011, is that Grassroots can then make the claim that “100% of your donation goes directly to the SPLC.” They merely forget to mention that they charge the SPLC three dollars for every dollar you send them.

As the graphic above indicates, 2018’s telemarketing shortage came to $603,913, meaning, once again, that EVERY DIME raised over the phone in the SPLC’s name went to pay off the telemarketers, with long-time donors picking up the tab for the $600k shortfall.

Every year, we ask the musical question, “How many loyal, long-time donors does it take to pay off the telemarketers?”

For 2018, at $100 a pop, it would take 6,039 suckers to fill the deficit. At a more reasonable $25 donation rate, only 24,157 well-meaning people, who genuinely thought with all their hearts that they were somehow “fighting hate.”

We like to use this annual scam update to remind our readers that, as far back as 1989, SPLC Founder Morris Dees promised donors that once his company socked away $100 million in the bank they could “cease the costly and often unreliable task of fundraising” once and for all.

Mr. Dees made that first hundred million by 2002, passed the $200 million mark in 2007, the $300 million mark in 2014, and crossed the $400 million line in 2017. At its current rate of $304,109 donor-dollars a day, the SPLC should break the $500 million dollar level by the first week of April, 2019.

All this begs the question as to why the Southern Poverty Law Center is still actively raising funds? When we crunched the SPLC’s financials from 2000 to 2017 last year, we found that the company spends, on average, 41% of its annual budget on fundraising and only around 4% on legal case costs, on average.

Think about how much good the SPLC could do with the $22 million they spent on fundraising last year, which doesn’t even include the $1,500,000 they paid to third-party telemarketers.

How much is enough?

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