Three charities supposedly focused on breast cancer and cancer in children raised $26 million in a single year. Good news, right? The bad news is that less than $15,000 of those funds got used to help victims of cancer. CNN, the Tampa Bay Times, and the Center for Investigative Reporting found that the three charities have a lot in common — their leaders are all related to each other:
Anderson Cooper and Drew Griffin note that CNN and its partners have been reporting on this for more than a year, and yet the IRS doesn’t seem terribly interested in investigating their tax-exempt statuses. They had plenty of time to harass Tea Party and other grassroots conservative groups, however. Kudos to Cooper for saying that out loud.
On a more general note:
Among the findings:
— The 50 worst charities in America devote less than 4% of donations raised to direct cash aid. Some charities gave even less. Over a decade, one diabetes charity raised nearly $14 million and gave about $10,000 to patients. Six spent no cash at all on their cause.
— Even as they plead for financial support, operators at many of the 50 worst charities have lied to donors about where their money goes, taken multiple salaries, secretly paid themselves consulting fees or arranged fund-raising contracts with friends. One cancer charity paid a company owned by the president’s son nearly $18 million over eight years to solicit funds. A medical charity paid its biggest research grant to its president’s own for-profit company.
— Some nonprofits are little more than fronts for fund-raising companies, which bankroll their startup costs, lock them into exclusive contracts at exorbitant rates and even drive the charities into debt. Florida-based Project Cure has raised more than $65 million since 1998, but every year has wound up owing its fundraiser more than what was raised. According to its latest financial filing, the nonprofit is $3 million in debt.
— To disguise the meager amount of money that reaches those in need, charities use accounting tricks and inflate the value of donated dollar-store cast-offs – snack cakes and air fresheners – that they give to dying cancer patients and homeless veterans.
Americans are a generous people. To be certain that your generosity is used for the purpose you intend, don’t just donate over the phone (which I refuse to do, ever), but instead seek out charities that work for causes you support. Do some research on what they do, how much of their donations go to administrative costs, and how transparent their finances are to their donors. Otherwise, you may not be helping to cure cancer, but instead helping a few less-than-savory operators have more fun with your money than you would have.