2013-06-17

Co.Exist

The 5 Worst Charities In The United States

There are plenty of online resources to tell you the about the most trustworthy charities. But if you want to know which are the absolute worst, read on.

Doing good isn’t easy. Even when you cast out the profit motive and give to charity, you’re faced with the difficult decision of which charity to give to. Organizations like GiveWell, Charity Navigator and GuideStar make this process more transparent, though they have their own weaknesses. But nothing throws the high-performing charities into sharper relief than a look at who’s on the bottom end.

The Center for Investigative Reporting and the Tampa Bay Times spent more than a year investigating "America’s Worst Charities": organizations where most of the money goes to telemarketers and mailers instead of to the ostensible charitable cause. The two news organizations found plenty of charities where 90% of donations go back into fundraising. They argue that nearly 1 billion dollars of charity money has been misspent by these groups.

Here are the five worst offenders:

Kids Wish Network

Kids Wish Network is a knock-off of the Make-A-Wish Foundation with a penchant for squandering money. Over the last decade, $3.2 million went to actually granting the wishes of the sick children who are its so-called beneficiaries, while nearly $110 million went to corporate fundraisers. The group has recently retained a crisis management specialist who worked for the federal government after the BP oil spill.

Cancer Fund of America

Cancer Fund of America ships free goods to cancer patients. But in the last decade patients have received less than $1 million in direct cash aid out of $98 million raised. That’s less than the founder James T. Reynolds Sr. and the many family members he employs receive each year in salary. About those fundraising expenses, Reynolds told the Tampa Bay Times: "I can’t help it that some things are costly."

Children’s Wish Foundation International

Yet another Make-A-Wish knock-off, Children’s Wish spent $600,000 granting wishes in 2010, while spending 10 times that on its fundraisers.

American Breast Cancer Foundation

The American Breast Cancer Foundation was supposed to pay for breast cancer screenings. It spent its first 13 years of existence—from 1997 to 2010—sending 75% of its donations to professional fundraisers, including Joseph A. Wolf, son of the foundation’s founder Phyllis Wolf. The two are no longer involved with the charity, but in the first year under new management (the most recent reported data), the charity spent less than 10% of its donations on direct aid, and nearly 9 times that on fundraisers.

Firefighters Charitable Foundation

The Firefighters Charitable Foundation isn’t for firefighters, but for victims of fires. In the last decade it spent less than 10% on those victims, and 90% on its fundraisers. Brokers, who arrange contracts with the telemarketers that do the fundraising, got a cut of about 4%.

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12 Comments

  • Moutica

    Police unions have harassed and threatened myself and my family on multiple occasions, which is no surprise given prosecutions by the USDOJ and reporting on their commission telemarketers using narcotics from numerous media sources. Before contributing to a charity, check a watchdog website and look at the tax records public to all non-profits to see what their financials look like, then research the person/s at the helm and how the money is being spent-picnics with kids, or cash to medically retired cops. While there are many crucial community roles I want our police to perform well, charity is not one of them.

  • Chris Glynn

    Its a complex issue and this kind of list gives paints a dangerous narrative. Theres often a false 'zero-sum' idea around charity stating that if you collect more than you spend then the net effect is positive  If you're talking about direct elicitations of donations then isn't always the case with smaller inefficient charities running at high overheads taking money which could otherwise be gathered at less cost by larger charities running at more efficient economies of scale. That said, some charities do not rely on existing wishes to donate and its entirely possible that a charitable organisation with what at first looks like extravagant spending is targeting groups who don't see their spending as donations at all. This is generating money that would not otherwise go to charitable groups and as such any profit is good profit.

  • victoria farrand

    This is a rediculous article. As an example, if a charity spends $50,000 on professional fundraisers and those fundraisers in turn raise $2 million in funds, isn't it worth it? We have a terrible missconception of 'charity' in the world right now. I'd like to see the sources of your facts and claims. Watch this TED talk from Dan Pellotta if you want to know the truth about what's wrong with America's charitries http://www.ted.com/talks/dan_p... 

  • Matt Sharp

    Looking at admin/marketing costs is a terrible way to determine how good a charity is.

    What matters are results: if a charity spends 90% of its income on admin/fundraising, but with the remaining 10% helps save 100 lives, then it's doing better than a charity that spends 10% of its income on fundraising but only saves 1 life with the remaining 90% (assuming the total income of each charity is the same).

  • Robin Register

    one way to find out for sure have them open the books.Yes fundraising can be costly but when the people you are supposed to be helping get lost in the shuffle it's time to make some big changes. Starting at the top

  • Justin Bell

    This is an inappropriate way to identify the "worst charities." Non-profits, when operated properly, often look similar to their for-profit counterparts. That being said many organizations will forfeit their primary goals (wether that be profit - in the private sector - or aid - in the charitable sector) for a period of time so that they can bolster their infrastructure. Spending early on developing strong staff, connections, and brand can result in greater ROI down the road. Creating a stigma around internal spending (especially concerning salaries that attract highly skilled individuals) is weakening the ability of our charitable organizations to operate at their full potential.

  • guest

    Salaries of nonprofits purporting to help the needy should not be so outrageous!!  Many charities I have discovered use almost exclusively volunteers to do the "work" of the charity, or very-low-paid workers, selling donated goods, but the "bigwigs" make over $100,000 per year (in some cases many times that!) .  Yes, "attracting highly skilled individuals" is important, but it doesn't seem right that it is obviously a money-making venture for some of the individuals involved.  

  • David Bradley

    I agree with both points here. There is an amazing TED talk about his exact thing. http://www.ted.com/talks/dan_p... It is really eye opening.

    We have to start looking at NPOs in a different way. Yes, I think the numbers in this article are unreasonable, but classifying them as "worst" is a bit extreme without more information. These organizations have to be able to pay for staff and operating costs just like any other company. If these numbers are part of a plan to increase impact over time vs. a limited impact in the short time, we have to consider that possibility. 

    The video gives a great example. If a bake sale raises $60 for a cancer research organization and the organization receives 100% of the money, that is great. But if the organization raises $100 million and 40% is spent on infrastructure and investment back into the organization the org spends $60 million on its cause. 

    If you really want to look into something I think is a tragedy look into higher education fundraising. Somehow, these institutions are building $100 million buildings and hiring professors at $500k a year who only teach one class (mainly with teaching assistants), can't be fired for lack of performance (tenure), and are only required to publish once a year (which doesn't matter because of tenure). And tuition to our public and private institutions continues to rise while graduation rates drop and job placement is at an all time low. Where is the list of "worst Universities"...   

  • Josh

    there is some truth to this comment, but I believe there are also nonprofits that carelessly spend on frivolous items and fail to keep themselves accountable to their supporters. 

  • Khira

    Wow. You'd think they'd at least be smart of enough to put some of those misappropriated funds toward a fancy PR person who'd help veil crap like this: "I can’t help it that some things are costly."

  • foobird

    They do, and they say things like this: " Creating a stigma around internal spending (especially concerning salaries that attract highly skilled individuals) is weakening the ability of our charitable organizations to operate at their full potential."