From the April/May 2011 Charity Rating Guide & Watchdog Report
Rated Charity and Its Fundraiser
Be Put on a Leash
If you are an animal lover you may have
received a t-shirt or other unsolicited gift from SPCA International
(SPCAI), a charity that states its mission as "advancing the safety
and well-being of animals." One highly publicized program of the
group is "Operation Baghdad Pups," through which the charity purports
to assist U.S. soldiers in bringing animals from war zones to the
United States. Unfortunately, this AIP F rated charity spent only
8% of its cash budget on this and other programs in 2009. Since
its founding in 2006 SPCAI has grown at a breakneck rate, raising
$7 million in cash contributions in 2009 alone-though this growth
has come at a high cost. In addition to spending very little on
its programs, the charity is operating while in multi-million dollar
debt to its fundraisers.
While SPCAI is in no way connected to
the better known American Society to Prevent Cruelty to Animals
(ASPCA), it is easy to see how its familiar sounding name might
confuse donors into thinking it is somehow affiliated with this
or other well-established charities with similar cruelty prevention
causes. SPCAI does not run any animal shelters of its own, nor does
it claim to, but it does donate funds to other animal charities
via its "Shelter of the Week" grants. Donors should be cautioned
to not assume, however, that the support SPCAI provides to shelters
is substantial. The charity boasts of the impact of these grants
on its web site, listing more than seventy shelter grant recipients
in 2009, but these grants totaled only $67,000-less than $1,000
per shelter. In contrast, the charity spent $9.5 million of its
cash budget on fundraising, including solicitation letters with
educational messages meant to raise "animal cruelty awareness."
In 2009 SPCAI spent $128 to raise each $100 in cash support, ending the year in the red to the tune of $6,684,000. According to the charity's tax filing of the same year, it purchased $5,196,000 worth of "printing and related services" from its top vendor, Quadriga Art, and $1,143,000 of "database services" from Quadriga's related company, Brickmill Marketing Services. The charity's 2009 audit reports that about 99% of the charity's total debt is owed to Quadriga Art and its related companies.
Readers might remember Brickmill and
Quadriga Art from AIP's August 2010 article, "Millions in Future
Donations to Vets Charity Will Pay Debt Owed to Vendors." In
this article AIP called attention to the unusual contractual obligation
that existed between Brickmill and Disabled Veterans National
Foundation, requiring that charity to use future donations to
pay off large, past debts to Brickmill before it could spend money
on charitable programs. While AIP is not aware of an explicitly
similar contract existing between SPCAI and Brickmill, the charity's
2009 audit does refer to a 10-year agreement beginning in 2006 between
SPCAI and a company that provides "the production of direct
mail solicitation materials, website development, and processing
of cash receipts." The audit note states that under this agreement
"the Organization is obligated to reimburse the Company for
all costs incurred on behalf of the Organization." If SPCAI's
only revenue stream continues to be "contributions and grants"
as it was in 2009, this means future donations to SPCAI will at
some point be used to pay off this charity's past debts.
This is not the first time officers and
directors of SPCAI are alleged to have run a charity into debt with
Quadriga Art. Pierre Barnoti incorporated SPCAI in Delaware in 2006
while he was still the executive director of another charity in
Montreal, the Canadian SPCA (CSPCA). According to Canadian
court documents, "Early in 2008, Barnoti was dismissed as director
of CSPCA while he was on a sick leave. He then initiated legal proceedings
against CSPCA for wrongful dismissal." CSPCA's president, Michel
Poulos, and treasurer, Howard Sholzberg, also left the Canadian
charity in 2008 but continue to serve as directors on the board
of the U.S. group, SPCAI. Shortly after Barnoti's departure Alana
Devine became CSPCA's acting executive director and revealed to
the Montreal Gazette that the charity was $4 million in debt.
Jamie Allister, CSPCA's new treasurer as of 2008, told the Gazette
that $3.5 million of that debt was owed to Quadriga Art. AIP contacted
Pierre Barnoti and his attorney for comment but neither responded
to our specific questions about the information in the Gazette.
Barnoti's lawyer e-mailed AIP saying "the slant it was given
by the Montreal media is not correct," and declined further
comment citing pending litigation.
Some others involved with SPCAI may also
have less than stellar track records in the nonprofit sector. Terri
Crisp, program development manager at SPCAI, founded and served
as president and executive director of the charity Noah's Wish
(NW). In 2006 the California Attorney General (CAG) investigated
this charity to examine allegations including "that contributions
made to Noah's Wish for the purpose of rescuing and caring for the
animal victims of Hurricane Katrina were not used for this specific
purpose." In a settlement agreement NW disputed this allegation,
along with other allegations made by the CAG that the charity "lacked
adequate fiscal controls over its funds" and that "problems
existed regarding board governance." As part of the 2007 settlement
Crisp did not admit wrongdoing but was barred from further involvement
with NW and not permitted to serve "in any position having
the duties or responsibilities of an officer, director, or trustee,
with any nonprofit organization for a period of five (5) years..."
The settlement required NW to hand over $4 million to the attorney
general's office to be distributed as donors had intended. Crisp's
daughter, Jennifer McKim, was also previously a "key employee"
at NW and now serves as program coordinator for SPCAI.