Assemblyman Matthew Titone (D-North Shore) has introduced new telemarketing legislation into the New York assembly that would require telemarketers raising money for charities to disclose how much of their donation will actually go to the organization.
If passed, telemarketers would need to specify how much money they were taking in profit and how much would end up in the charity itself.
“Generous New Yorkers have a right to know where their donations are going and how that money will be spent,” Titone said.
In 2012, a report was issued called “Pennies for Charities”. This report showed that out of every dollar raised by telemarketing companies for charity, only 0.38 went to the charity with the remainder going to the telemarketing company. In that year alone over $249 million in donations were raised in New York and Titone believes that New Yorkers should be made aware of where their funds are going.
If the legislation passes telemarketers would have to send a follow up letter to everyone that donated explaining the breakdown of the funds.
This would give them the information they need to determine if they want to donate in the future, and is aimed at specifically helping to educate the elderly and disabled, who he claims are often victims of telemarketers.
From a telemarketers perspective, if the legislation goes forward it will require an additional compliance step that cannot be ignored. It is likely that someone within the organization would need to be hired or assigned to the specific task of sending follow up letters to contributors and keeping record of this correspondence.
Some things will need to be clarified. For example, how quickly after the donation was recieved does the letter need to be sent? Do telemarkters need to inform contributors that a letter will be sent and how long will the records need to be kept? Companies raising money in New York, and throughout the country, need to stand by for the next couple of weeks until individual states are done with their legislative sessions.
Many companies fall into the trap of only watching telemarketing legislation at the federal level, while ignoring individual state legislation.
Each state has the ability to create and enforce laws that regulate the industry so it is important to conduct research prior to calling in that state. This recent telemarketing legislation out of New York is only one example.
For state specific information you can visit the state attorney generals office website or put in a call to them in order to be directed to where you can access their regulations. If you are hired to run a large state wide campaign make sure to understand the rules before you start dialing. It could save you and your firm thousands in fines. Most state sessions end by mid April so we should know the results of New York’s telemarketing legislation then.