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 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 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."
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.
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.
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%.