Very simple (a real case) concering a medical charity appeal aiming for
half-million UK pounds (multiply by about 1.6 for US dollars):

Money actually raised                           = #48,000

10% fee                                         =  #4,800

Expenses claimed (including hospitality,
        per diem, travel - inlcuding executive
        jet hire on two occasions! etc.)        = #76,000

Result: the charity received a bill for percentage fee and expenses
totalling #80,800 against the #48,000 actually received.

The UK Charity Commissioners are nowadays likely to become very interested
in any case where fundraising administrative costs, fees and expenses
(including the cost of in-house fundraising staff) runs much above 10%

Patrick Boylan

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On Fri, 28 Mar 1997, Tod Engine wrote:

> Date: Fri, 28 Mar 1997 18:48:59 -0500 (EST)
> From: Tod Engine <[log in to unmask]>
> To: Boylan P <[log in to unmask]>
> Subject: Re: Fundraising ethics: % $$ incentives
> Newsgroups: bit.listserv.museum-l
>
> <<< There have been a number of high-profile cases in which
> contract fund-raisers have swallowed up in fees and lavish expenses
> almost all of the money raised, though I do not think there have been any
> allagations against museums on this point.>>>
>
> I don't understand.  If the fundraiser was working on a percentage how
> could he have used up all the money raised?  I can see this happening if
> he charged a flat fee, if he charged $5,000 in fees and the drive only
> raised $5,000.   Actually I don't see why a percentage is all that bad.
> If the goal is $100,000, and the fundraiser charges 10% or $10,000, with a
> cap of $10,000 maximum fee to be paid, then if the fundraiser is not
> performing his job correctly he would not recieve full payment.
>
> Charging a flat fee gives the organization little means to entice the
> fundraiser to reach the goal.
>
> Where is the hidden pitfalls with percentages that I am not seeing?
>
> Rick
>