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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.
Brett Trapp, Boosterthon's vice president of client experience, defended the company's share.
"What they get for that money ... is totally worth it -- totally justified," Trapp said.
He argued that the company is selling a broader package that includes educational efforts in the school as well as the fundraising activities. Those educational efforts are pitched as character education, and include content such as anti-bullying messages.
While 52 percent of the collected funds do go to the PTA, that $2,000 upfront fee means that the PTA will actually likely end up with a profit that's less than half of what is raised.
"Using outside for-profit fundraising firms -- whether the charity is using a telemarketing firm or special event management firm -- is often a tremendously inefficient way to raise money," Miniutti wrote.
It would be better to pay the fundraising company for their time, or at an hourly rate, said Daniel Borochoff, president of CharityWatch. It's also important that the company and the PTA be upfront about that rate, he said. It wasn't clear whether donors were aware of the arrangement in this case.
Borochoff said that the PTA is bringing valuable items to the table: the students, who do the frontline fundraising, and the network of connections and supporters that the campaign taps into.
Trapp said the split is justified, and emphasized that all of the costs of the fundraising activities and the character education are coming out of the company's cut of the funds.
The package the company provides includes about 300 hours of planning and organizing work, sending company staff members to the school for nine days, setting up a pep rally, a book on character-building for every teacher and a T-shirt for each student, among many other things.
"A large part of that percentage that goes to Boosterthon is going back to the school," Trapp said. "Of course, we have to keep some of that to ... run our organization."
In some cases, the company even loses money, he said.
The company has a long list of repeat and satisfied clients, he said, and its business model is based on forging good relationships. The company is in 1,000 schools across the country, and expects to be in about 1,400 in the coming year.
Shannon S. Couvillion, PTA president, said a parent brought the program to the PTA's attention because the school's theme this year is building healthy lifestyles.
The portion Boosterthon took was large, Couvillion conceded, but the company provided something to the school, and the PTA didn't have any other costs involved.
"It wasn't like we were sending them home with the product," Couvillion said. "We chose to sell them a service."
The fundraising itself is based on the donors supporting students' participation in the fun run.
Donors can give a flat amount or pledge an amount per lap. Most students make 30 to 35 laps around the roughly 1/16th-of-a-mile track.
Couvillion praised the character and fitness education, ranging from daily team huddles with the grade levels to fitness drills.
Borochoff also said that the fundraising and the character education ought to be separate transactions. If the company runs a worthwhile educational program, he said, it ought to be paid a fee for its services, not a proportion of the funds raised.
Couvillion said there were some parent complaints, but not a huge number. She thought the complaints came in because the concept is so new, she said. And she said the experience engaged the student body.
"The kids were extremely proud of themselves," she said.
Trapp said that, on average, working with Boosterthon gives PTAs a 70 percent boost over their past take-home performance, even after the company's cut.
Maybeury PTA's previous best was about $22,000, and the PTA is on track to receive $32,000 from the Boosterthon Fun Run after the split, Trapp said.
Homegrown fundraisers require a lot of volunteer work and haven't done this well, Couvillion said.
"It's hard on our volunteers," she said. "And this was very easy on our volunteers."
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.
A fair share?AGAINST THE FEESome charity groups say outside fundraising firms should get no more than 25 to 35 percent of money raised. For a school fundraiser, Boosterthon took 48 percent of the total raised, plus a flat $2,000 fee.IN FAVOR OF THE FEEA Boosterthon representative said the school's package includes about 300 hours of planning and organizing work, sending company staff members to the school for nine days, setting up a pep rally, and other provided materials.
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