Can You Spot Nonprofit Accounting Tricks?
Barron’s is urging donors “to be as rigorous in vetting nonprofits for accounting chicanery as you are with public companies trading on the stock exchanges.” Since nonprofits have the room to use "some fast accounting moves," it's up to donors "to ferret out such bad accounting practices.” CharityWatch helps donors see through nonprofit “accounting tricks.”
(Illustration credit: Brad Yeo for Barron's)
How Does CharityWatch Rate the Veterans Charities on Trump's Fundraiser List?
After much prodding from the media, presumptive Republican presidential nominee Donald Trump released a list of the veterans groups that received donations in connection with a fundraiser Trump held in late January 2016. While many groups were excellent choices, others were questionable or even outright poor choices based on CharityWatch's ratings.
Charity Uses Kids' Pictures Without Permission
Charity that purports to rescue missing children does very little of it. Of its total spending 66% went to its professional fundraisers, 1% went to investigations, and none went to provide cash or other assistance to victims or their families. See CharityWatch president, Daniel Borochoff, point out red flags at Crisis Relief Network's family of charities on NBC News.
Fake Pledge Reminders Lead to Suit Against Veterans Charity Fundraisers
“Donors need accurate information to make informed decisions. It’s too bad this company resorted to sending fake pledge reminders and other deception,” said the Attorney General of Minnesota (OAG) in a May 2016 press release. The OAG’s release announced its filing of a lawsuit that accuses for-profit fundraiser, Associated Community Services, Inc. (ACS), of sending false “pledge reminders” to donors and making other deceptive statements in its fundraising solicitation campaigns on behalf of Foundation for American Veterans.
Michigan AG Alleges Firefighters Charity Is a Scam
Firefighters Support Services (FSS) is “another example of a sympathetic cause – firefighters and those losing their homes from fire – being exploited by scammers,” according to the Michigan Attorney General (OAG). The OAG has filed a Notice of Intended Action and Cease and Desist Order against FSS, accusing the charity of using misleading, deceptive, or false statements in its solicitations. FSS raised almost $4.2 million in funds from December 2013 - January 2016 based on telemarketing scripts that told call recipients that donations would be used to help firefighters get better equipment and help “families that have been burned out of their homes by providing them with food, shelter, and clothing” or “financial support,” according to the OAG.
Ecuador Earthquake Relief
CharityWatch announces a list of highly efficient charities involved in efforts to provide emergency relief and humanitarian assistance to earthquake victims in Ecuador.
Following the devastating 7.8-magnitude earthquake that hit Ecuador on April 16, 2016 and the related aftershocks, relief efforts to provide food, shelter and other emergency relief supplies are likely to be needed for many months following the earthquake. The Ecuadorian Red Cross estimates that the number of affected people could reach up to at least 70,000 survivors, with 3,000-5,000 needing emergency shelter.
The death toll has reached over 650 people in Ecuador. Tens of thousands more have been injured and displaced in the earthquake aftermath. It is the worst disaster Ecuador has seen in decades.
Top Executives Fired at WWP: CNBC
Watch CharityWatch President, Daniel Borochoff, discuss Wounded Warrior Project in the wake of the firing of its two top executives on CNBC's Power Lunch.
Making Sense of WWP's Program Spending: Which Ratio Should You Believe?
Ever since the popular veterans charity Wounded Warrior Project (WWP) was accused of wasting donations on lavish spending in reports by CBS News and The New York Times in early 2016, WWP’s program percentage (i.e., the portion of WWP’s expenses used for its veterans programs) has drawn particular attention from many. Even Senator Charles Grassley of Iowa, Chairman of the Committee on the Judiciary, is questioning the level of WWP’s program spending. CharityWatch’s “C” rating of WWP is based in part on our calculation that WWP spends 54% of its cash budget on programs. Some of the other program ratios we have seen being bandied about range from about 60% to the 80.6% that WWP has vehemently defended.
Wounded Warrior Project: CBS News Investigation
Watch CharityWatch president, Daniel Borochoff, in Part 3 of a CBS News investigation that questions how much money Wounded Warrior Project is actually spending on veterans.
Syrian Humanitarian Relief
CharityWatch announces a list of highly efficient charities involved in efforts to provide emergency relief and humanitarian assistance to the people of Syria.
The extremely violent conflicts that began in March 2011 have claimed the lives of more than 250,000 people so far, leaving millions of people in need of emergency assistance.
As many as 13.5 million people in the region are in need of emergency assistance. As of early 2016, the violence has displaced 7.6 million people within Syria. According to the United Nations High Commisioner for Refugees 4.6 million Syrians are registered as refugees seeking assistance in neighboring countries—including Jordan, Lebanon, and Turkey—and the total number of people fleeing Syria may be much higher than that. Distribution of aid within Syria is difficult, and the large number of refugees into neighboring countries has overwhelmed social service providers.
(Image: © UNICEF/NYHQ2015-0153/Tiku)
South Sudan Relief Efforts
Tens of thousands of people have died and more than two million people have been displaced since civil war broke out in South Sudan in December 2013. Because of the war a food crisis is underway, with full-blown famine afflicting some regions. In June, USAID warned that nearly 4.6 million people in South Sudan will soon be facing life-threatening hunger. The conflict's widespread displacement of people has interrupted the usual planting season for two years in a row, fishermen have had to abandon rivers, and usually-bustling markets have been deserted.
The bleak situation has been made worse by confirmed cholera outbreaks.
Funding for aid is urgently needed in South Sudan. CharityWatch announces a list of highly efficient charities involved in efforts to provide emergency relief and humanitarian assistance to the people of South Sudan.
Police Charity Scheme Is a Rip-Off
See CharityWatch's president, Daniel Borochoff question the worthiness of a Wisconsin police charity on NBC Milwaukee news.
Giving Pitfalls and Traps
Listen to CharityWatch's president discuss on Iowa Public Radio pitfalls and traps that donors may unwittingly succumb to.
F Rated Planet Aid the Subject of a New Investigation
"Alleged cult leader plays shell game with US foreign aid" is the title of the Center for Investigative Reporting's (CIR) in-depth investigation into Planet Aid, broadcast in March 2016. For years CharityWatch has warned donors about Planet Aid's financial reporting and has consistently assigned the charity low ratings for its low program spending and high fundraising costs. The CIR investigation asserts that "money from USDA grants, over $130 million, up to 70% was allegedly taken from the projects it was meant for and stripped from employees salaries," and attempts to answer the question, "for what?" Planet Aid's ties to an alleged overseas cult and millions in clothing sales to fund projects in Africa with few visible results are just some of the concerns raised by CIR as it traverses continents to follow the charity's cash.
Many Congressionally Chartered Veterans Charities receive D's and F's from CharityWatch
Where do your donations go? Watch video that features CharityWatch's take on how some veterans charities are failing.
FTC, D.C. and all 50 States Take Action Against F Rated Cancer Charities
Four charities which have consistently earned F ratings from CharityWatch, Cancer Fund of America (CFA), Cancer Support Services (CSS) (an affiliate of CFA), Children’s Cancer Fund of America (CCFOA), and Breast Cancer Society (BCS), have been charged with bilking $187 million from donors in four years. Charges are being pressed by the Federal Trade Commission (FTC) and 58 law enforcement partners from every state and the District of Columbia, in one of the largest legal actions to date against charity fraud.
Update: By order of a settlement announced March 30, 2016, CFA and CSS will be permanently dissolved. CCFOA and BCS settled in May 2015 and are in the process of being dissolved. Additionally, the individual defendants named in the May 2015 action have been banned from charity work for life under the respective settlement orders. The March 2016 settlement concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.
The CharityWatch Hall of Shame now features defendant James Reynolds, Sr. and 24 of his family members for their web of deceitful charities. Our article Long Running Family Charity Scheme Exposed goes into more detail.
Dark Cloud Over Red Cross Blood Services Has Finally Been Lifted
After about 22 years, the U.S. Food and Drug Administration (FDA) has lifted its Consent Decree pertaining to the safety of the blood services operations of the American Red Cross, the nation’s largest supplier of blood products. A consent decree, in general, is a legal arrangement in which the government agrees to drop charges against an accused party who, without admitting guilt, agrees to refrain from certain activities.
Newsviews: Charity Donations
In these two videos CharityWatch president, Daniel Borochoff, offers advice on what donors should consider before giving money to charity.
Financial Sense Podcast featuring Daniel Borochoff on Wise Giving
Listen to a 30 minute podcast about how you can accomplish more with your charitable donations and also how to avoid getting ripped off.
Donors Should Research Veterans Charities Before Giving
Follow this link for a video and article featuring advice from CharityWatch president Daniel Borochoff. Donors should do their homework before donating to veterans charities to find out which ones are spending money efficiently on programs to benefit donors, and which ones have programs that don't duplicate benefits already provided by the Veterans Administration.
New York Attorney General Sues Children's Leukemia Charity For Deceiving Donors
From 2009 to 2013 National Children’s Leukemia Foundation (NCLF) raised nearly $10 million in charitable donations from generous donors throughout the United States. New York Attorney General Eric T. Schneiderman’s office has filed a lawsuit against NCLF, alleging that the group has used the vast majority of the donations they've raised for non-charitable purposes.
Senator Calls for IRS Review of Veterans Charity
“[Wounded Wheels] talk a lot about helping veterans, but to date it doesn’t appear they’ve done anything to help a veteran,” Daniel Borochoff, president of the watchdog group CharityWatch, said last week after reviewing Wounded Wheels’ financial records. “It seems like a cool idea, but they really need to show some kind of benefit to veterans to justify this as a nonprofit.” – The Virginian-Pilot, 7/8/2015
Click here to read the whole story and see the letter written by Senator Mark Warner
Yemen: Humanitarian Relief
Yemen has been added to the United Nations list of severe humanitarian emergencies, with twenty one million citizens in need of urgent help. Approximately 13 million Yemeni people are hungry and 15 million have no access to health care. An ongoing bombing campaign by Saudi Arabia began in March 2015. The armed conflict has claimed an estimated 3,000 lives, and is the biggest obstacle for relief groups attempting to reach the Yemeni people most in need of aid.
CharityWatch announces a list of highly efficient charities involved in efforts to provide emergency relief and humanitarian assistance to the people of Yemen.
New Charity Failing to Help Kids with Cancer
CharityWatch president and NBC 7 San Diego investigate WishWarriors' alleged failure to provide any financial assistance to the kids they claim to help.
CharityWatch offers these tips when donating to a new charity:
- You need to be able to trust the people running it.
- Research the organizers online.
- Ask for their qualifications. They should have relevant past experience.
Veterans Support Organization consistently rated F
CharityWatch criticizes Veterans Support Organization (VSO) for doing very little to help veterans.
Click here to watch CharityWatch president, Daniel Borochoff, and NBC West Palm Beach, FL investigators ask the founder of VSO tough questions about how it solicits and spends donations intended to help veterans.
Nepal Earthquake Relief Efforts
CharityWatch announces a list of highly efficient charities involved in efforts to provide emergency relief and humanitarian assistance to earthquake victims in Nepal.
Following the devastating earthquakes that hit Nepal in late April and early May, relief efforts to provide food and shelter are likely to be needed for the three months following the earthquakes. Up to two million survivors will need basic relief, such as tents, tarpaulin sheets, toilets, dry food, and safe drinking water.
The earthquake has killed thousands of people in Nepal, and dozens in neighboring India, Tibetan China, and Bangladesh. Thousands more have been injured and are displaced in the aftermath of the earthquake.
Nepal is one of the poorest countries in Asia, so relief efforts and reconstruction will be largely dependent on aid from international governments and nonprofits.
In addition to the human devastation, many of the UNESCO World Heritage sites in Nepal have been irreparably damaged.
CharityWatch Takes a Tough Stand on Charities with High Assets
Navy Seal Foundation, aren't doing any favors for those who need help now. Charitable dollars are limited, having remained at about 2% of GDP for over four decades, while the needs of society are not. Charities that hoard the funds they raise and keep assets greater than three years worth of their budgets are making those donated funds unavailable to other groups with urgent needs.
CharityWatch President, Daniel Borochoff, spoke with the Virginia Pilot about downgrading charities that keep high assets. Click here to read the article.
Thrift Store Donations for Veterans Charity Investigated
Veterans benefit very little when clothes and household items are donated to Vietnam Veterans of America. Watch CharityWatch president talk with Portland, OR KATU TV investigators about CharityWatch's analysis of this F rated charity.
See our article Donors Intentions Violated at For-Profit Thrift Stores for more on the topic.
Iraq Crisis Support
CharityWatch announces its top-rated list of charities offering aid to the millions of people facing displacement, water shortages, power outages, and health epidemics.
Ebola Virus Epidemic: Best Way for Donors to Help
As of mid-September 2014, more than 4,784 people have been sickened and at least 2,400 have died. Guinea, Liberia, and Sierra Leone have been hardest hit, with cases in Nigeria as well. The current epidemic is spreading more widely than previous Ebola outbreaks, with inadequate access to health care in the countries affected making it particularly difficult to bring the epidemic under control.
While the United States and other world governments have made large pledges for treatment and prevention of the virus, the groups that are working to contain the virus are urgently in need of critical monetary assistance.
Million Dollar Pay at Nonprofit Hospitals Is it acceptable for the head of a nonprofit to earn a seven-figure salary? Upon what criteria should a salary be based? A recent study in JAMA Internal Medicine reveals that a CEO at a nonprofit hospital earns, on average, about $600,000 a year and the median salary of a CEO at a large nonprofit urban hospital is over $1.66 million. Read more.
See the Top 25 Compensation Packages of charity officers, directors, trustees, and key employees. From the CharityWatch Rating Guide.
For details about one charity executive's unusual compensation package, read Eye-Popping Pay.
F rated Veterans Charity Busted: $24.6 Million Settlement with Attorney General
CharityWatch was the first to warn the public of a $8.4 million debt in 2008 and other serious problems with Disabled Veterans National Foundation (DVNF) in Millions in Future Donations to Vets Charity Will Pay Debt Owed to Vendors. The charity continued to dig itself into a huge debt to its professional fundraisers, reaching $16.5 million in 2012.
Only a tiny portion of DVNF's cash donations ever went to helping disabled veterans. CharityWatch applauds the New York AG Office for finally putting a stop to many of this group's bad practices.
Supporting Children in Afghanistan and Pakistan
CharityWatch announces this list of highly efficient charities currently involved in Afghanistan and Pakistan.
Update: Greg Mortenson, Central Asia Institute
In April 2012, Montana Attorney General announced a settlement agreement requiring Greg Mortenson, author of Three Cups of Tea, to pay more than $1 million in restitution for financial wrongdoing at the charity he founded, Central Asia Institute. The very same three person board, which includes Greg Mortenson and is responsible for the mismanagement of CAI, is empowered with selecting its replacement board, according to the settlement reached with the Montana Attorney General. Read the CharityWatch article that sparked the investigation, and listen to Daniel Borochoff discuss the settlement agreement on NPR. For Borochoff's comments on how the nonprofit sector could be affected by shortcomings in the AG's settlement, read this AP article.
UPDATE: Click here to read about CharityWatch's continued concern about Central Asia Intitute and its "?" rating.
Lack of Disclosure Makes Giving to Televangelists a Risky Business
Large religious TV networks that repeatedly ask you for charitable donations are allowed to hide how they spend your dollars. If you want to know if your donation is used to fund TV broadcasting or charitable aid, a tax-exempt religious broadcaster does not have to tell you.
Know Your Options When Giving to the Red Cross
In the wake of any humanitarian disaster that hits the U.S., the American Red Cross (Red Cross) usually takes the lead in providing immediate and long-term disaster relief services. The Red Cross, though, has not been immune from criticism related to how it allocates the spending of donations contributed in response to disasters. Thanks to an October 23, 2013 agreement with New York's Attorney General, the Red Cross will give online donors clear options with respect to how their contributions will be used and provide transparency about such uses.
Leadership Booted at Dishonored Veterans Charity
Help Hospitalized Veterans (HHV), which earns an F rating from CharityWatch, has been sued by California's Attorney General. The AG shares CharityWatch's long held position that HHV's accounting gimmicks inflate the reported amount of contributions spent on program services to help veterans. As part of the settlement, officers and directors named in the suit must resign and pay restitution. CharityWatch has been critical of HHV for years, and puts the settlement agreement in context with our article Leadership Booted at Dishonored Veterans Charity. For more CharityWatch reporting on HHV, check out these past articles:
Supporting Fellow Americans during the Economic Crisis
CharityWatch announces a list of highly efficient charities currently offering services to the increased number of Americans suffering from hunger, mental illness, drug or alcohol abuse, homelessness, old age, or others who are in need of human services during this time of economic crisis.