Card issuers keep charities' share secret

NEW YORK — New York -- If you contribute to a charity, you may have been solicited for a credit card in the charity's name. It's estimated that more than 200 charities raise money this way. Every time you use the card, the charity gets some small amount of money.

But exactly how much money? There's the rub. Many of the JTC charities won't tell. They'd like to, they say, but the bank that issues the card won't let them.


"No good," says Bennett Weiner of the Philanthropic Advisory Service of the Council of Better Business Bureaus. Without that information, donors don't know if they're giving the charity a penny or a dollar. And watchdogs like the BBB can't tell whether the banks are tossing the charities only crumbs.

When charities do not disclose, they don't get the BBB's full stamp of approval, which means that some potential donors won't give.


At least three charities have revolted against keeping the secret, as generally required by MBNA America Bank in Newark, Del., which issues large numbers of these cards:

* The National Audubon Society. Its brochure says, "Every time you use the [credit] cards, a percentage of the purchase price will be donated to the National Audubon Society. . . ." But what percentage? The society isn't supposed to say.

Nevertheless, James Cunningham, Audubon's senior vice president for finance and administration, discloses that it gets one-half of 1 percent of the retail sales charged to the card, which currently yields more than $100,000 a year. Audubon has asked MBNA to release it from the secrecy clause, Mr. Cunningham says, "but we have not gotten a positive response." If the card issuer refuses, he says, "we'll begin to disclose anyway."

Audubon's basic card costs $20 a year (waived the first year). You pay 18.9 percent on unpaid balances.

* The National Alliance for the Mentally Ill (NAMI). It has stopped promoting its MBNA credit card, in order to comply with the BBB's standards, according to director of development Serrin Foster. Last April, NAMI asked MBNA for permission to disclose and was refused.

"The banks are holding the charities hostage," she says. "They don't allow disclosure so they can be in a better bargaining position with each separate group."

NAMI earned about $15,000 last year from 1,000 credit cards.

NAMI's contract with MBNA is almost up, and Ms. Foster has been intending to look for another bank. But recently, she got a call from MBNA, saying it was holding a meeting on the subject. "So we'll see," she says.


* The Defenders of Wildlife (DOW) has just negotiated a one-time agreement with MBNA to disclose its cut, says the Defenders' Lisa Swann. Like Audubon, DOW is getting one-half of 1 percent (5 cents for every $10 charged to the card). Its card costs $25 a year (waived the first year), plus 18.9 percent interest on unpaid balances.

When DOW first raised the disclosure issue with MBNA, Vice President Donald Finch replied, in a letter, that "the DOW royalty structure is extremely high. . . . If we were to print [it], I guarantee that I would have 23 [other] groups on the phone with me inside of a week. This non-disclosure helps insure the DOW can retain its superior royalty structure as well."

Put another way, if DOW insists on disclosing, the bank might reduce the money DOW gets. That sure sounds to me like "holding charities hostage."

David Spartin, MBNA's senior vice president for investor relations, declined to discuss the situation of any specific group. But, he says, "if the group wants to disclose, then we will." All MBNA clients, take note.

Not all banks demand secrecy. For example: The Bank of Baltimore's card for the Rails to Trails Conservancy (RTC) in Washington. RTC converts abandoned railroad beds into trails for walking, bicycling, horseback riding or skiing.

Its brochure discloses that the bank pays RTC $10 for every new account and 0.375 percent of retail sales volume. Furthermore, this is a well-priced card: $18 a year (waived the first year) and only 15.9 percent charged on unpaid balances.