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that not more than 30 percent of the contributions, grants, and
bequests a charitable organization receives should be spent on
fundraising. NCIB suggests that, where more than 30 percent was
spent on fundraising, then the prospective contributor should
further analyze the charitable organization’s operations and ask
the charitable organization for an explanation regarding the
percentage of proceeds spent in fundraising. In particular,
NCIB’s contributor’s checklist pamphlet states as follows:
Some fund-raising practices are always expensive--
acquisition of new donors through direct mail or
telemarketing, for example--and yet they may be the
only methods available to an organization if it hopes
to reach the general public. Some charities which rely
heavily on bequests will have fundraising costs that
vary considerably from year to year. New
organizations, organizations with causes that are
little known or controversial, organizations with a
contributor base made up of many smaller contributions
rather than a few large grants--are all likely to have
relatively high fund-raising costs, and yet they may be
quite well managed.
W&H; AICR
W&H began business in late 1981 as a two-person partnership
owned 50 percent each by Jerry Carroll Watson (hereinafter
sometimes referred to as Watson) and Byron Chatworth Hughey
(hereinafter sometimes referred to as Hughey). As of the time of
the trial in the instant case, Watson and Hughey have been W&H’s
only two partners. Before forming W&H, Hughey was employed at
the Viguerie Company from 1978 to 1981. From 1983 through the
time of the trial in the instant case, W&H maintained its offices
in the Washington, D.C., area, in Alexandria, Virginia. (In July
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