Ohio resident Carol Patterson, who donated her time and convinced some of her neighbors to help out the American Diabetes Association, is disgusted with the organization and doesn’t plan to contribute her time or money ever again.
Hearing her story makes us clench our fists, but even more infuriating and disappointing is how the ADA has responded to the allegations in question.
By now, it’s no secret Bloomberg’s BusinessWeek magazine ran an exposé on Sept. 12 on the deceitful practices of Ohio telemarketing firm InfoCision; nearly 80% of donation money doesn’t go to the charity they’re working for, but rather straight into that company’s pockets. The American Diabetes Association was showcased as one of a number of national advocacy organizations taken in by this apparent scam, along with the American Cancer Society and the American Heart Association.
According to the story: “Just 22% of the funds the (ADA) raised in 2011 from the nationwide neighbor-to-neighbor program went to the charity, according to a report on its national fundraising that InfoCision filed with North Carolina regulators.”
Yet the ADA-approved script instructed the reps to say that at least 70% of the money raised in this specific campaign would be used for charitable purposes.
At best, this is an extremely embarrassing snafu for the organization. How is it possible that they were taken in by this “fundraising service”?
At worst, “It’s like a betrayal” to PWDs and other supporters, as Carol Patterson told BusinessWeek. She says: “I know I won’t donate again. It’s like they stabbed you in the back. It’s terribly wrong.”
So how has the ADA has responded? Have they fired InfoCision? And what do they want donors or potential contributors to know, especially as we head into National Diabetes Awareness Month?
ADA’s Airbrush Response
The story hit nearly a month ago, giving the ADA ample time to formulate a response letting the Diabetes Community that the organization was taking appropriate action. Yet we couldn’t get a straight answer. In numerous email exchanges over the course of a week, we asked for details on the type of changes they have implemented or are considering. Those questions were left unaddressed, as the ADA’s manager of communications and social media, Anna Baker, simply forwarded this “canned” statement:
“We want to make sure the public has the facts regarding our work with InfoCision… It’s important to note that the value of this relationship extends beyond the important donations InfoCision generates on our behalf. We are deeply grateful for every donation we receive through this initiative, but these donations represent just one part of the program’s broader purpose.
“Other benefits, for example, include the acquisition of new volunteers and donors to our organization, the chance to cross-promote and introduce donors to Association programs, and the opportunity to reach new audiences with crucial diabetes information through personal, peer-to-peer outreach. For context, in 2011, as a result of this initiative, we recruited over 300,000 volunteers to distribute letters containing critical diabetes information to more than three million households.
“In terms of feedback, we received some calls and emails in response to the recent coverage. Some individuals expressed a desire to send future donations directly to the Association, which, of course, we would graciously accept. 73 percent of the Association’s overall spending directly supports our mission, and every donation makes a difference. We are currently revising InfoCision’s script to avoid any confusion that may exist regarding the nature of their work on our behalf.”
Um… “revising InfoCision’s script to avoid any confusion that may exist?” What’s that supposed to mean?! And obviously the ADA would be grateful for any donation… but what do you say to those people who donated as a result of these calls and expected more than 20% of their contribution to actually go to the charity at hand? Or those who volunteered based on the telemarketer’s pitch?
Wanting to dig deeper, we tried again. And got this response on Oct. 12:
“We are in the beginning stages of discussing the script revisions at this time. A small number of people contacted ADA’s local chapters following the story. These chapters responded by providing similar context and clarity regarding ADA’s telemarketing program. ADA’s executives have demonstrated great leadership in advancing the important mission of our organization. We hope to benefit from their continued guidance for years to come.”
What?! So their response is to praise their leadership?
They did add a little detail about how the telemarketing business helps recruit volunteers, which one has to assume provides some value in itself:
“InfoCision helps ADA reach people in communities where we do not have a presence by using telemarketing to recruit volunteers and request their help in distributing valuable diabetes information to their neighbors. Many of the people reached this way will take action and engage with us at some level; through our educational programs or by contacting their Members of Congress on our behalf. Some people stay connected with us for years as a result of this initiative.”
OK, but won’t folks be less inclined to donate or volunteer for the ADA after learning about this misuse of funds?
ADA leadership’s statement in the BusinessWeek story didn’t bode well either. Richard Erb, vice president of membership and direct marketing, is quoted as saying: “Obviously, if people feel betrayed or that we’re not being honest with them, it doesn’t make me feel well. But the thing is, we’re a business. There has never been a time or a place where we said, ‘Most of this money is coming to us.”’
Wow… so much for thinking like a non-profit. And why is he talking about how he feels, rather than how his constituents might feel??
The ADA is essentially arguing that the end justifies the means, because future donors and volunteers are being tapped. Well, that just doesn’t hold water when it all comes down to misleading the people you’re trying to recruit.
For InfoCision’s part, they have publicly stated that the Bloomberg story was unfair and misleading, since singling out one telemarketing campaign for a specific purpose was not a fair assessment of their work. The company states that national charities generally keep 70 to 75 percent of the total donations generated.
The BusinessWeek story says the company is known for shady practices but has “barely been touched by legal trouble over its fundraising for charities.” It did agree to pay $75,000 to settle a case brought by the Ohio Attorney General’s Office this year after allegations were made that InfoCision employees misled people over the phone by giving them false information about how much of their contributions would go to charities, and in some cases, paid staffers identified themselves as volunteers as they called potential donors. The $75K in fines turned out to be “equal to less than one-10th of 1 percent of its revenue from charity fundraising from 2007 to 2010.” Ouch.
But since the BW story ran, the telemarketing company’s CEO was replaced and at least one new lawsuit has been filed against the firm, accusing it of misrepresentation. A second law firm is exploring a potential suit, too, but nothing had been filed by mid-October.
What Will the Neighbors Think?
We looked into it, and discovered that other D-organizations raising money aren’t using telemarketing efforts in the same way.
From the JDRF:
“… we do not use any telemarketers to solicit donations and have not done so for more than 15 years. People donate to JDRF because we have a solid track record of funding research efficiently and effectively. More than 80 percent of what we spend goes directly to research and research-related education, which is among the highest percentages for charities nationwide.”
People may disagree with “efficient and effective” donations, but that’s not the point – they’re saying they don’t use telemarketing and are extremely careful not to mislead donors about where their money is going.
Not surprisingly, we got a bullish response from the Juvenile Diabetes Cure Alliance, self-proclaimed watchdog on the donors of diabetes charities.
“The fact that people were lied to about their money, and that the ADA basically acted as if that were no big deal, are both big issues,” the JDCA’s associate editor Nick Masercola responded in a discussion about the situation. “From a personal standpoint, the business practice seems silly. They get 80 percent, and you get 20? There’s no better way to get donations than that? I wonder if it will effect the amount they take in during the next month.”
We have to agree that it’s doubly unfortunate the ADA hasn’t been more “transparent” about its missteps and more proactive about fixing what’s broken just as we head into National Diabetes Awareness Month — the most visible and busy time of the year for donations and support. A “turn-off” to diabetes charities is the last thing anyone needs right now.
“Revising the script” isn’t going to cut it, ADA. You’ve got to stand up and earn the trust and engagement of the people you want to depend on.