Posts Tagged ‘telemarketers’

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?

SPLC — 2018 Telemarketing Scam

April 25, 2018

Earlier this month the Southern Poverty Law Center released its IRS Form 990 tax return, noting that the company took in a staggering $136,373,624 dollars in Fiscal Year 2017 (leaving a paltry “non-profit” of $76,589,303 for the year) and the already-bloated Endowment Fund exploded from $319 million for 2016 to $432 million for 2017, 99.17% of which is “unrestricted” in use.

Page 39 of the document breaks down what the company paid third-party telemarketers for the year. As usual, the amount paid to the telemarketers far exceeded the amount of money raised over the phone in the name of “fighting hate.”

2017 Telemarketers

The SPLC paid four third-party telemarketing companies $3,177,807 donor-dollars to raise only $1,801,207 donor-dollars on its behalf.

This leaves a shortfall of $1,376,600.

As usual, this means that not only did every dime raised from unsuspecting first-time donors go directly to the telemarketers, but thousands upon thousands of longtime donors got tapped to pick up the shortfall without ever realizing it.

How many people does it take to mop up a seven-digit deficit? At $100 dollars a pop, 13,766 loyal, longtime donors. At a more reasonable $25 dollar donation, just over 55,000 suckers.

How can a private advocacy group afford this kind of horrific hemorrhaging year after year? It’s quite simple. The SPLC takes a minor financial hit each year to get the names and addresses of thousands of proven first-time donors. They feed this information into their own huge, uber-efficient in-house fundraising machine and the future donations will roll in for years, if not decades, to come. As the old saying goes, “It takes money to make money.”

Granted, the SPLC is not the only non-profit to engage in this kind of thing, and all donors have a responsibility to ask any telemarketers how much of their donation will actually reach the organization in question.

We at Watching the Watchdogs feel that the public ought to see the real numbers and see for themselves where their money actually goes.

The “Financial Information” page on the SPLC website makes the claim that “During the last fiscal year, approximately 68% of our total expenses were spent on program services.”

That’s a noble goal, and when you look at Line 16b on Page 2 of the Form 990, you see that the company spent 21% of those expenses on out-and-out fundraising. When you add in the $12 million in “joint costs,” those fundraising costs attributed to other departments (“Management” spent just over $1,000,000 on postage, for example) found on Line 26 of Page 11, however, you find that the SPLC spent 41% of its budget on fundraising right off the top.

When you figure in salaries, facilities costs and all of the other expenses of running a company with more than 300 employees, it’s pretty hard to see how 68% of expenses went to “program services.”

In the long run, most of the donors don’t really care. They each have their own concept of “fighting hate” and their canceled donation check or SPLC bumper sticker allows them to virtue signal to the world how wonderful they are.

In short, the donors are buying a product that the Southern Poverty Law Center is only too happy to sell them.

Caveat emptor.


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