Firm's 48 Percent Take of Fun Run Proceeds Criticized
Maybeury Elementary School's parent-teacher association recently held a fundraiser called a Boosterthon Fun Run that's on track to bring in more than $30,000 for the Henrico County school's PTA.
But the company that helped put on the event will take 48 percent of the total money raised, on top of a flat $2,000 fee the PTA paid to get started. The arrangement is laid out in a contract between the PTA and the company. The county's school division is not a party to the agreement.
Charity watchdog groups say the cut going to the company, Boosterthon, is far too high, but the PTA president and the company both defend the deal, saying the benefits of the arrangement, including the company's character education service, outweigh the costs.
"Unfortunately, these rates are not unusual. But that doesn't make them acceptable," Sandra Miniutti, vice president for marketing and chief financial officer of Charity Navigator, said in an email. Charity Navigator is a nonprofit group that evaluates charities.
Charity Navigator holds that outside fundraising firms should get no more than 25 percent of the money they raise, she said. CharityWatch, another watchdog group, says fundraising costs shouldn't be more than 35 percent.
Individual PTAs might like the arrangement because they get more money by taking a smaller proportion of a much larger amount raised. But both watchdog groups noted that it could have consequences for the larger community.
"Charitable dollars are limited," Borochoff said. "They tend to be 2 percent of people's personal disposable income."
More money given to Maybeury and split with the company is less money for other worthy causes in the community, he said.
"The PTA, you'd hope, would have it together to motivate people to raise money for the cause and not have to pay this," Borochoff said.
May 13, 2014
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