The Great Charity Scam

[Formaldehyde]

There are literally thousands of so-called charities which are really nothing but scams. Many of them use for-profit telemarketers who eat up 90% or more of the donated amount. Many times these paid telemarketers are part of the operation itself.

The top 50 worst offenders collected $1.35B last year, and only $380M went to the charities themselves. Of that amount only $49M was actually paid in direct cash aid, which is less than 5% of the funds collected. Some of them, like the American Foundation for Chidren with AIDs, National Narcotic Officers Associations Coalition, Operation Lookout National Center For Missing Youth, and Project Cure actually paid no money at all to victims or their families whom they were claiming to help.

When these charities are finally banned from practicing in one state, they merely move to another state or no longer fleece the residents of that particular state. The state of Florida has a law which states that ex-cons who have been convicted of a crime involving money cannot be telemarketers. The majority of employees of one telemarketing firm are ex-cons, so they supposedly just handle out-of-state calls to circumvent the law.

Extensive Tampa Bay Times Coverage

List of 50 worst charities

It seems like a very simple problem to fix. Ban any charity from using paid telemarketing services, car giveawaways by for-profit companies, or other similar scams. Enforce minimum disbursement levels to beneficiaries. Establish maximum salaries based on the size of the charity. Thoroughly audit their books to assure that money isn't being siphoned off to family members and others. But most importantly have more than a handful of people in each state to closely monitor the more than one million charities in the US.

 

[downtown]

My wife used to work for this organization, which evaluated and investigated charities: http://www.charitywatch.org/

They said, and I've heard this from others in the non-profit community, that charities aimed at veterans are habitually the worst offenders.

 

[Formaldehyde]

From the list of the 50 worst above, charities which deal with medical conditions, children, police, and firefighters are also frequent scams.

One 72-year-old Minnesota woman who was suffering from dementia was fleeced for nearly $15K from 2008 to 2011. It was only discovered after she was placed in an Alzheimer's facility and her daughter-in-law reviewed her credit card purchases.

 

[Murky]

Some charities don't like to do fund raising so often will outsource it to telemarketers who take most of the donations.

 

[Formaldehyde]

That is why I think for-profit telemarketing for charities should simply be made illegal. If the charity doesn't want to actually put in an effort to raise money in an efficient and economical manner with either volunteers or workers hired to do it for a nominal salary with no commission, they really aren't a charity at all.

 

[bhsup]

This is why you limit yourself to good, known, reputable ones like the Salvation Army.

 

[Zelig]

I think a better solution would be to ban telemarketing.

 

[El_Machinae]

Yeah, you've got to be careful. The big risk is that the "fear of being fleeced" will prevent someone from giving to charity. That's the wrong attitude, and the instinct needs to be fought. We don't give nearly enough, but we need to give aggressively where it will do good.

 

[Winston Hughes]

If the charity doesn't want to actually put in an effort to raise money in an efficient and economical manner with either volunteers or workers hired to do it for a nominal salary with no commission, they really aren't a charity at all.

According to friends who work in it, the charitable sector here in Britain has been eating itself for some years now, with marketing strategies that are rational for individual charities (i.e. they promise to increase revenues more than costs) being irrational for the sector as a whole. These strategies focus on taking money from the existing 'pot' of charitable donations, so that nearly all gains come at the expense of other charities, and, in particular, the ones who spend less on those marketing strategies. And, even worse, the increased frequency and aggressiveness of both 'guilt-trip' advertising and direct solicitation are probably driving down the total amounts given to charity by the public at large.

 

[Formaldehyde]

This is why you limit yourself to good, known, reputable ones like the Salvation Army.

What could possibly be wrong with a homophobic paramilitary organization which owns thousands of expensive homes so their "officers" can live in splendor?

In Los Angeles and Orange counties alone, the charity owns 87 homes and condominiums worth about $52 million. Nationwide, it valued its real estate holdings at about $4 billion in 2008 -- one-third of its total assets.

That reputation makes the charity's real estate holdings a surprise to some observers. The group owns three Santa Monica houses worth $1.1 million to $1.6 million and eight properties in wealthy Rancho Palos Verdes -- all used by officers.

"I just have a problem with them standing out there with their kettles at Christmastime and people putting their hard-earned money in there when they own millions and millions and millions of dollars of real estate," said Windon, who has not donated to the charity since learning about its real estate holdings. "It just doesn't look right. I don't like it."

 

[bhsup]

http://www.charitywatch.org/toprated.html

EDIT: OOPSIE, accusation fail!

"No local funding, say the Red Kettle money or the United Way money or any of the government funds or the private donations that come to the Salvation Army throughout the year are used to purchase those housing," said Major Todd Hawks, who's in charge the Atlanta Area Command.

He said the money for the houses comes from wills and estates and from planned giving - a gift arranged by someone, legally, to be given to the Salvation Army at a future time, perhaps after death.

http://www.11alive.com/news/article/292679/0/Salvation-Army-owns-millions-of-dollars-worth-of-homes

Like Major Hawks, Salvation Army officers are ordained ministers, which is why, like some churches, they are provided homes. The size of the house depends on the size of the family.

"My wife and I are both officers in the Salvation Army. We have 3 children and we receive an allowance of 12 hundred dollars on a bi-weekly basis."

That's a combined allowance of $31,200 a year after taxes. Salvation Army officers don't have a lot of expenses because, as we learned, they not only get the houses, they are partially furnished, utilities are paid, as well as gas for the cars they get, like the late model Toyotas we saw in many driveways.

"Salvation Army officers get moved every 3 to 5 years. I can move with a U-Haul rather than, say, a moving company," Hawks said.

Seem more reasonable now?

 

[BvBPL]

Many charities frontload the costs of fundraising. It can be expensive to initially collect first contributions, but this cost is reduced on the backend as future contributions can be collected through less costly methods, such as direct mail, once contributors are identified.

 

[rugbyLEAGUEfan]

It's not like they are making it some big secret. So Form, you disagree with their reasoning?

"Salvation Army officials say the real estate program makes sound business sense because it enables them to pay low salaries and transfer officers throughout the country without the burden and delay that typically accompany executive moves. It's a policy similar to that of churches that provide housing to their ministers, said Victor A. Leslie, a lieutenant colonel who oversees the Army's Southern California"

Whilst as a group they believe homosexuality to be immoral, do they make a big deal about it or does it impact upon their charity work? Genuine question, I dunno. If not, well heh it's a free country.

 

[innonimatu]

According to friends who work in it, the charitable sector here in Britain has been eating itself for some years now, with marketing strategies that are rational for individual charities (i.e. they promise to increase revenues more than costs) being irrational for the sector as a whole. These strategies focus on taking money from the existing 'pot' of charitable donations, so that nearly all gains come at the expense of other charities, and, in particular, the ones who spend less on those marketing strategies. And, even worse, the increased frequency and aggressiveness of both 'guilt-trip' advertising and direct solicitation are probably driving down the total amounts given to charity by the public at large.

Looks like a good reason to ban expenses on marketing by charities. One possible solution: if they want to advertise let them do so in a limited way for free on some kind of institutionally provided media (the UK still has public radio and TV?) or through volunteers.

Spending on charity, if we think about it, is very often more a problem than a solution. The usually never solve the causes of the problems they're set up to adress, only ameliolate the consequences. That's a good thing to do, but the resoucres or the public goodwill effort might have been better used targeting the causes of the problems. This example of needless spending on marketing whows just that. A state-run social security nertwork that covered what these charities are doing would neither compete with itself nore need to sepnd on marketing. Except, perhaps, to persuade voters to support it, which in some places can take wuaite a lot or persuading...

 

[JollyRoger]

I have set up a non-profit that does a fairly good job of separating birthers from their money.

 

[Winston Hughes]

Looks like a good reason to ban expenses on marketing by charities. One possible solution: if they want to advertise let them do so in a limited way for free on some kind of institutionally provided media (the UK still has public radio and TV?) or through volunteers.

Spending on charity, if we think about it, is very often more a problem than a solution. The usually never solve the causes of the problems they're set up to adress, only ameliolate the consequences. That's a good thing to do, but the resoucres or the public goodwill effort might have been better used targeting the causes of the problems. This example of needless spending on marketing whows just that. A state-run social security nertwork that covered what these charities are doing would neither compete with itself nore need to sepnd on marketing. Except, perhaps, to persuade voters to support it, which in some places can take wuaite a lot or persuading...

There are certainly things that the state ought not to be leaving to charities, including, as you say, most of what falls under the heading 'social security'.

But, as I understand it, the more effective charities tend to outperform governments by huge margins when it comes to things like funding cutting-edge medical research, if for no other reason than they don't have to satisfy the whims of ignorant, short-termist, PR-obsessed politicians.

 

[Silurian]

The BBC does a fair bit to raise money for charity. Both on TV and Radio.

"The BBC is committed to informing its audiences about a wide range of charities so that they can increase awareness about the work they do and raise much needed funds so that they can continue helping those who are in need."
Mark Thompson, Director-General, BBC .

http://www.bbc.co.uk/charityappeals/

 

[Chiteng]

This is not news. For example: All aid sent to Haiti was wasted. The people are still
living in rubble, if they are living at all. The money was stolen.

The point is, charity, begins at home

 

[JollyRoger]

The point is, charity, begins at home

And dances at the strip club

 

[bhsup]

No no, that's her sister Chastity.