Seven "Charities" That Are Spending Your Money in All the Wrong Places
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Donating to charity can have a tangible positive effect in the community, assuming the organization to which you’re donating doesn't put money where it isn't supposed to go.
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Charity Navigator, which ranks nonprofits, offers this rule of thumb:
"The most efficient charities spend 75 percent or more of their budget on their programs and services and less than 25 percent on fundraising and administrative fees."
So which charities don't follow this guideline?
CNN, the Center for Investigative Reporting, and the Tampa Bay Times teamed up and spent more than a year analyzing thousands of documents from the last 10 years of available federal tax filings to find out which charities in America wasted the most donated money. The data was updated in December 2014.
“These are charities that let their professional fundraisers keep up to 90 percent of all contributions,” Kris Hundley of the Tampa Bay Times said. “The cash misspent over the past decade has amounted to nearly $1 billion.”
Check out some of the facts from the investigation below.
Here are the top seven worst charities the team uncovered, ranked by how much money was misspent on “soliciting costs" from professional fundraisers who worked to get as much money in donations for the organization as possible.
1. Kids Wish Network
The Kids Wish Network raised millions purportedly to support dying children and their families. But the investigation revealed that the lion's share of donations got diverted to the charity’s for-profit companies that were hired to raise more donations. When all is said and done, sick children wound up with fewer than 3 cents of every dollar raised.
2. Cancer Fund of America
The Cancer Fund of America supposedly collects and donates goods to patients dying of cancer and their families. But of the $98 million CFA raised in the past 10 years, less than $1 million found its way to cancer patients in the form of direct cash aid.
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3. Children's Wish Foundation International
The Children’s Wish Foundation International mimics the name and mission of the Make-A-Wish Foundation in Arizona. That's where the similarity ends: Children’s Wish spent $6 million for services from "professional fundraisers" in 2010, but only about $3.6 million on kids in the same year.
4. Firefighters Charitable Foundation
The Firefighters Charitable Foundation was created to “provide financial assistance” to people affected by fire or disaster. But from 2002 to 2011, the foundation paid $55 million of its $64 million in donations to companies that solicited donations, the investigation found. Fewer than 10 cents of every dollar raised actually went to assist those in need.
5. International Union of Police Associations, AFL-CIO
The International Union of Police Associations, AFL-CIO, is meant to provide financial assistance to the families of fallen police officers. But of the $8.1 million raised in 2011, 92 percent went to professional fundraisers.
6. Breast Cancer Relief Foundation
The Breast Cancer Relief Foundation raised $64 million over the past decade, but IRS records show that the foundation is one of America’s most wasteful charities, the investigation reported. Companies that helped it “professionally fundraise” kept 70 percent of the donations. A little more than 2 percent of the donations actually went to hospitals or to women who needed breast cancer screenings.
The investigation team reported that the Breast Cancer Relief Foundation also does business as the National Cancer Coalition, as well as the Cancer Center for Prevention and Detection (Pacific West Cancer Fund).
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7. American Association of State Troopers
The American Association of State Troopers purportedly offers retired state troopers and highway patrol officers the opportunity to access low-cost life insurance benefits. But since 2004, the organization has raised about $45 million and spent less than $4 million on member benefits.
For tips on how to donate to legitimate charities and avoid scams, the Federal Trade Commission offers this advice and information.
