Veterans Charities employ controversial telemarketers to tug on heartstrings and loosen purse strings

Businessman banned in New York still raking in millions from unsuspecting donors, regulators say


By Sarah Kleiner, Center for Public Integrity

MONTVILLE, N.J. — Homeless veterans. Breast cancer survivors. Disabled police officers. Children with leukemia.

In the name of helping these people and others like them, a private telemarketing company has for years solicited millions from donors while keeping the vast majority of the cash for itself.

The company, Outreach Calling, raised more than $118 million on behalf of about two dozen charities from 2011 to 2015, according to a Center for Public Integrity analysis of state government records. The company kept $106 million of this haul, leaving $12.2 million — or 10.3 percent — for its client charities.

Now Outreach Calling is expanding into the highly unregulated realm of political fundraising. In the first nine months of the year, the company has kept $1.3 million out of the $1.5 million raised for a veterans-focused political action committee that’s emerged ahead of critical 2018 midterm elections.

RELATED: Donors give millions to help veterans, but most goes to telemarketers

The man New York state regulators say is the driving force behind Outreach Calling is Mark Gelvan, a wealthy 49-year-old New Jersey businessman whom they banned in 2004 from fundraising in New York, in part because his solicitors impersonated police officers when they asked for donations.

It’s not against the law for telemarketers to keep most of the donations they raise. It is illegal to mislead prospective donors or lie to them about how their contributions will be used, said Jim Sheehan, head of the charities bureau for the office of New York Attorney General Eric T. Schneiderman.

Defense attorney Joseph Patituce (left) holds up a document for telemarketing executive Mark Gelvan (right) during testimony in a court proceeding Oct. 9, 2013, in Cleveland. Tony Dejak/AP

Nonprofit watchdogs say the most effective organizations spend no more than 25 percent of their expenses on fundraising and overhead. CharityWatch, a nonprofit that analyzes charities’ financial statements, has given an “F” on an A+ to F scale to 13 of 16 charities that contracted with Outreach Calling in 2016 and 2017.

Two of the charities that hired Outreach Calling have been shut down by the New York attorney general’s Office in recent years, and Gelvan — whose wife owns multi-million dollar properties in New Jersey and Florida — remains under New York state investigation, according to court documents.

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