Sam Uretsky

Charity Cases

One thing about government, it can do too much and too little at the same time. Apparently it can even do too much and too little at the same time and the same place. At about the same time that Congressman Darrell Issa was hogging television time with his witch hunt for a Robert Ludlum quality conspiracy by the Internal Revenue Service to target patriotic Tea Party public service groups, Anderson Cooper was on CNN complaining that nobody was doing anything about the problem of phony charities that are collecting billions of dollars and providing very little, if anything, to the causes they claim to serve.

Mr. Cooper and CNN have a history of doing independent reporting on the subject of false charities, but a recent example of this fight was the work of the Tampa Bay Times and the Center for Investigative Reporting in compiling a list of the 50 Worst Charities in America. The fact that the CIR was involved is a reflection of the state of investigative journalism today. Although CIR dates from 1977, its work has become increasingly important as newspapers and even broadcast media become less able to fund long term investigations. CIR has won a large number of awards for its work, which has included reports on government cover-ups as well as corporate and individual activities . In 2005, CIR and the Washington Post reported on the way the government was teaming with the data mining industry to monitor Americans as part of the War on Terror. In 2012, the organization won a MacArthur Award for Creative and Effective Institutions and its report on hospital billing practices won a George Polk Award. Another CIR investigation was a Pulitzer Prize finalist. The fact that for the past decade the New York Times has been Pulitzer Prize winner for investigative journalism over half the time is less a demonstration of the Times’ superiority than the effect of declining revenues on the newspaper industry making it more difficult for any paper to support the kind of in-depth reporting we often need.

Work on the 50 Worst Charities was done by Kris Hundley of Tampa Bay Times and Kendall Taggart of CIR, and took a year to compile, using state records when available, but more often by combing press releases and news reports, and going back 10 years to exclude charities that might simply have had a single bad year. They examined finances back to the time the charity was founded,

The Times report, available online at <http://www.tampabay.com/americas-worst-charities/> focused on the amount of money a charity spent on fund raising compared with the amount spent on fund raising and the percentage of income they reported as spent towards the charities’ actual mission. Where comparisons are possible, their results are similar to those of the non-profit Charity Navigator (Charity Navigator has a more complex set of standards, and at the same time, blanks out the details when they post a “donor advisory”.)

CNN, which in the past has done excellent work investigating questionable charities, joined with the Tampa Bay Times and CIR, contributing additional reporting and providing television time to showcase the results. They found evidence of interlocking operations: “ 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.” They found one family where father, mother and son each had their own faux cancer charity.

As a group, the 50 worst charities raised about $1.3 billion over the ten year period studied, but of that, $1 billion went to the fund raisers. CNN reported that if the money collected by false charities or ver part 10 years had been used properly “... it would have been enough to build 20,000 Habitat for Humanity homes, buy 7 million wheelchairs or pay for mammograms for nearly 10 million uninsured women.”

When CNN aired the report, Drew Griffin said to Anderson Cooper: “...I’m calling you live from Cincinnati where IRA workers had time to review applications for Tea Party groups but nothing seems to get done when we let it all out... I just don’t understand why no no one in government state or federal can do anything...” In the past, state regulators have acted against some phoney charities, but that’s only a minor annoyance. The fake charities close their doors and reopen with the same methodology but another name. In extreme cases they may move to another state. Usually the penalty is $500, which won’t even cover the cost of the investigation.

Oh yes, the IRS would be the logical agency to act against the charity hoaxes, but on July 9, House Republicans proposed a 24% cut in the IRS budget.

Sam Uretsky is a writer and pharmacist living on Long Island, N.Y. Email sdu01@mail.com.

From The Progressive Populist, August 15, 2013