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Two Layers of F's

- published in the August 2008 issue of the Charity Rating Guide & Watchdog Report

What happens when you donate one dollar to an F rated charity that gives it to another F rated charity? In the case of The Veterans Fund (VF) and Help Hospitalized Veterans (HHV), about a nickel’s worth of program services is all that results. In 2006 VF granted $20,000 to HHV. According to AIP’s latest ratings of these groups, once funds spent on educational messages included in these charities’ solicitations are excluded, VF and HHV spent only 17% and 31% of their fiscal 2006 cash budgets, respectively, on program services. This left only 5% of the original donation available for veterans services programs. While neither charity uses donor dollars efficiently, this inefficiency is only compounded when funds change hands from VF to HHV – a good illustration of why a donor may accomplish more with their charitable dollars by giving directly to a charity of their choice rather than through an intermediary group such as VF.

An AIP member in Wisconsin recently told AIP that Center Stage Attractions, a phone solicitor for VF, asked her if she would like to renew her $15 donation that she made last year. Not remembering having ever donated to VF the AIP member was smart to not make a pledge until she reviewed her records. After doing so she told AIP that she had never donated anything to this charity. Donors often complain to AIP of this fundraising tactic used by some charities to confuse donors into thinking they have donated in the past with the hope that the unsuspecting donor will open their wallet. Center Stage Attractions certainly has some incentive to confuse donors. They received 80% of VF’s total contributions in 2006, with VF paying a little over $1 million in professional fundraising fees to the company, according to the charity’s tax form.

Hunting down VF’s tax form was not easy. On its Internet site the organization reports being located in Chesapeake, Virginia. Its 2006 tax form gives a Nashville, Tennessee address, and its CEO is listed at a Gainsville [sic] Florida address. Center Stage Promotions is located farther south in the state in Ft. Lauderdale, Florida.

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Last Update: August 31, 2012