His main advocacy group, American Solutions, ranks as the largest money-making machine of its kind in the country, collecting more than $52 million in its first four years–though nearly two-thirds of that went to fundraising expenses that some experts describe as unusually high.
That’s quite an income-to-expense ratio for a nonprofit. Consumer advocates have noticed.
[American Solutions] spends nearly $2 on fundraising for every $3 it brings in–about twice the figure for many nonprofit groups, experts said. In 2009, for example, the group reported spending $8.8 million for professional fundraising, about 61 percent of total revenue.
Rather surprising, especially when you consider how much Gingrich wants for an autographed “Speaker’s Gavel (simulated)”. As the Post reports, nonprofits should spend no more than 35 percent of their income on fundraising efforts.
More troubling are the group’s methods:
In 2009, American Solutions blast-faxed an unknown number of potential donors with a pitch to have their names included in a newspaper ad bashing the Obama administration. (At least one fax went to a Democrat, who leaked it to Politico.)
According to complaints on consumer-focused Web sites, some American Solutions calls begin with slanted polling questions before proceeding to a request for money. The tactic, known as “fundraising under the guise of research,” or frugging, is discouraged as unethical by trade groups such as the Marketing Research Association.
Why the hard sell if they’re shelling out $2 for every $3 they take in? Maybe it’s not money Gingrich is after. According to the Post, American Solutions has three hundred thousand donors who gave $200 or less–and about 2 million names on its contact list. Might come in handy for a presidential bid.