Well-run charities in the U.S. use their own staff to raise funds, and spend most of the donations on easily verifiable activities. Experts say a charity should spend less than 35 cents on the dollar for fundraising.
The underbelly of the charity game looks a lot different.
A report published last week by the Tampa Bay Times and The Center for Investigative Reporting, based on a year-long investigation, identified some 6,000 charities that pay huge shares of their donations to for-profit companies to raise money for them.
These 501(c)(3) outfits gull donors by adopting popular causes or calling themselves names similar to those of well-known charities, according to the report. “The nation’s 50 worst charities have paid their solicitors nearly $1 billion over the past 10 years that could have gone to charitable works,” the report said.
Based on their names, 14 of the 50 charities supported law enforcers, firefighters or paramedics; 13 focused on children; 10 took up cancer as a cause; and six supported military veterans.
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The report’s findings include the following:
- The 50 worst U.S. charities devoted less than 4% of donations to direct cash aid
- Many operators among this bad bunch lied to donors about where their money went, took multiple salaries, secretly paid themselves consulting fees or arranged fundraising contracts with friends
- Some nonprofits were essentially fronts for fundraising companies
- Charities used accounting tricks and inflated the value of donated dollar store products they gave to dying cancer patients and homeless veterans.
Following are the 10 worst offenders based on cash paid to solicitors in the past decade as identified by the Times and CIR.
10. Children’s Cancer Fund of America
Total raised by solicitors: $37.5 million
Paid to solicitors: $29.2 million
Percentage spent on direct cash aid: 5.3%
9. American Association of State Troopers
Total raised by solicitors: $45 million
Paid to solicitors: $36 million
Percentage spent on direct cash aid: 8.6%
Total raised by solicitors: $70.2 million
Paid to solicitors: $36.9 million
Percentage spent on direct cash aid: 7.8%
7. International Union of Police Associations, AFL-CIO
Total raised by solicitors: $57.2 million
Paid to solicitors: $41.4 million
Percentage spent on direct cash aid: 0.5%
6. Breast Cancer Relief Foundation
Total raised by solicitors: $63.9 million