It’s always a good thing when companies decide to give back the community, however things can go terribly awry if well intentions are misused and mishandled.
The Tampa Bay Times in collaboration with the Center for Investigative Reporting and as of June 2013, CNN, have put together a fairly comprehensive list of “America’s Worst Charities“, using data from the last 10 years. In developing the study, researchers found the following:
- The 50 worst charities in America devote less than 4 percent of donations raised to direct cash aid. Some charities give even less. Over a decade, one diabetes charity raised nearly $14 million and gave about $10,000 to patients. Six spent nothing at all on direct cash aid.
- 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 fundraising 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 fundraising 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.
Among the worst offenders named is the Reynolds family.
After spending nearly 20 years building Cancer Fund, the family began spinning off new cancer charities, each with a similar mission and a relative or close associate in control. The family has founded five cancer charities that pay executive salaries to nearly a dozen relatives.
Shame on them.
It’s not all bad news, however, the milk of human kindness does flow rapidly with these charities who only want to do good.
If you are thinking about starting a philanthropic program, make sure you do your research. Organizations like Charity Watch, Charity Navigator and Guidestar are just a few that can help you ensure that your company’s (and your employees’) money is going to a legitimate cause.