Have You Been Scammed By a Charity?

06Like vultures circling above road kill, scam artists  swoop in on the wake of every disaster, capitalizing on your compassion and manipulating your emotion.

Charitable organizations  run the gamut from upright and successful, to well meaning but incompetent, to corrupt, greedy and devious—and everything in between.

The Tampa Bay Times and the Center for Investigative Reporting (CIR) put together a list of the top fifty worst charities by going through thousands and thousands of public records collected by federal and state governments. While they were able to identify nearly  6,000 charities that chose to pay for-profit companies to raise their donations, only  the top 50 were selected, based on the money they  diverted to boiler room operators and other solicitors over a decade.

For the worst of these charities, writing big checks to telemarketers is a way of life.  The top fifthy raised more than $1.3 billion over the past decade and paid nearly $1 billion of those donations to companies that raised the donations.  Well run charities rely on their own staff to raise funds and spend the majority of the funds they raise on easy to verify activities.

These nonprofits adopt popular causes or mimic well-known charity names to fool donors and then they rake in cash, year after year.  Even as they plead for financial support, operators at many of the top 50 lied to donors about where their money goes.  Some of these charities are nothing less than fronts for fundraising companies, which bankroll their startup costs, and lock them into exclusive contracts at exorbitant rates.

Number one on the list is Kids Wish Network.  In 2012 alone they raised $18.6 million and spent only $240,000 granting wishes.  Much of the balance was diverted to enrich the charity’s operators and the for-profit companies they hired to drum up money.   In the past decade, Kids Wish has channeled nearly $110 million donated for sick children to its corporate solicitors.  An additional $4.8 million  went to pay the charity’s founder and his own consulting firm.

Number twelve on the list was the Youth Development Fund, a Tennessee based charity that raised almost $30 million by promising to educate children about drug abuse, health and fitness.  Almost 80% of the funds raised went directly to for-profit solicitation companies with most of the balance being spent on scuba-diving videos starring the charities founder and president, Rick Bowen.

Of the worst charities, 39 have been disciplined by state regulators, some as many as seven times; 8 have been banned in at least one state; one was shutdown but reopened under another name; and one-third have relatives on their payroll or board of directors.

Charities that made the worst list include: Kids Wish, the Cancer Fund of America, Children’s Wish Foundation International,  the Firefighters Charitable Foundation, the Breast Cancer Relief Foundation, the International Union of Police Association – AFL-CIO, the Youth Development Fund, Wishing Well Foundation USA, Shiloh International Ministries, Project Cure, Operation Lookout National Center for Missing Youth, the American Breast Cancer Foundation, the American Association of Deaf and Blind, the American Association of State Troopers,  and the National Veterans Service Fund.  The list can be viewed in its entirety at this link.

Following a few specific guidelines will help you navigate your way through a charity call, without falling victim to a scammer. Charity Navigator and the Center for Investigative Reporting list five basic strategies.

  • Find Out Exactly Who’s Calling: Ask if the caller is a telemarketer or a volunteer or employee of the charity itself.
  • Ask Where Your Donation Goes. By law, the caller must tell you how much of your donation will actually end up with the charity.
  • Get It In Writing. Ask to be sent a copy of the charity’s annual report or a brochure about their organization.  If they refuse odds are they are not reputable.
  • Do Some Research. Tell the caller you will get back to them—ask for their organization’s name, address and phone number. Don’t donate without first doing your due diligence.
  • Eliminate the Middleman. If you suspect it’s a telemarketer on the phone but you wish to support the charity, contact the charity directly to make your donation.

Most importantly, never give out credit card or personal information over the phone. 

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