Manitobans advised to probe charity costs

Manitobans are being urged to give charities a second look — especially those that hire professional fundraisers — after a CBC I-Team investigation found that often only a small percentage of funds raised actually goes to the worthy cause.

Winnipegger Lauren Phillips received a phone call from a telemarketer raising funds for the Niagara Falls, ,Ont.-based Children's Leukemia Research Association Canada.

"They were calling on behalf of a child named Hana, who has leukemia, and gave me a little story of this girl named Hana," said Phillips, whose own child happens to be named Hana.

Apart from that coincidence, Phillips was suspicious when the telemarketer told her paying by cheque would create an extra administrative expense and the firm preferred having Phillips's credit card number instead.

'I don't think it's ethical.' —Winnipegger Lauren Phillips

Canada Revenue Agency records show that between 2006 and 2009, the Children's Leukemia Research Association Canada raised more than $4.2 million. Of that, nearly $3.2 million went directly to fundraisers hired by the charity to conduct the campaign.

Financial records for the leukemia charity show that after covering administration costs just 14 per cent  — about $600,000 — actually went to help children with leukemia.

One of those fundraisers was Calgary-based Xentel DM Inc. The company said its fees are reasonable since costs associated with running a charitable campaign, including paying telemarketers, are very expensive.

Phillips said while professional fundraisers may be operating within the law, Manitobans should ask questions before just opening their wallets.

"I don't think it's ethical personally, because you have people donating their hardearned money to a charity they feel is worthwhile and half of those dollars are not going to the charity," Phillips said.