30 More Years of Keeping Charities Honest
May 23, 2022
Happy Birthday CharityWatch! Here's to Another 30 Years of Keeping Charities Honest
A message from CharityWatch Executive Director, Laurie Styron
If you were fortunate enough to grow up with a strong sense of right and wrong, you likely become frustrated as I do by a world that too often seems to reward bad behavior. Scammers and unethical charities that manipulate your desire to make the world a better place get rich while spending little to none of the money you donate the way they promise. Meanwhile, charities that operate more ethically by being honest and straightforward in their fundraising appeals don't always receive the funding they need for very worthy programs.
The donations you and others make to help a veteran obtain stable housing, rescue animals from abusive environments, provide support to cancer patients, or fund international relief efforts for refugees can easily be squandered by a charity with unreasonably high overhead and a malfunctioning moral compass.
- The Supreme Court ruled that the government is not allowed to require charities to spend a minimum percentage of your donations on programs. A charity can spend as little as 1% of your donation on its programs and 99% on overhead without breaking any laws.
- Charity trade associations that crowdsource marketing materials and self-reported financial information from the charities they are rating don't make it clear to donors that their charity ratings are not independent. Charities that receive "D" and "F" ratings from CharityWatch, such as Feed the Children, Paws for Purple Hearts, and Mutts With a Mission, often receive high marks for financial efficiency and governance in the online databases of these industry insiders who are unmotivated to speak critically about the charities whose interests they really serve.
- Without breaking any accounting rules, a charity can spend $80 or more of your $100 donation on fundraising costs while claiming in its tax forms and marketing materials that it spends 90% of its expenses on programs. Using an accounting rule known as "joint costs," charities that include a "call to action" in their fundraising appeals such as "fly the American flag to show veterans you care," or "stop smoking to prevent cancer" are allowed to report millions of dollars' worth of expenses paid to professional fundraising companies and other fundraisers as "programs." Why? Because that letter from the charity that includes 10 or more requests for a donation is considered "educational."
CharityWatch Needs Your Help
CharityWatch turned 30 years old this year. In my more than 18 years of working with CharityWatch, I have witnessed hundreds of millions of dollars siphoned from donors to line the pockets of scammers and unethical nonprofits that have zero guilt about manipulating you out of your hard-earned dollars. In my role as executive director, I feel an incredible weight on my shoulders to continue CharityWatch's important work, knowing that no other organization in the country is motivated to step up and expose the truth to donors about how their donations are really being spent.
Often viewed as an intermediary between donors and the charities they want to support, CharityWatch's work is critically important but difficult to fund. The $50 membership contributions we receive do not cover the costs of our in-depth financial analyses and other investigative work. In order for us to continue, we need your help. This is why I hope you will consider making a donation today.
- Make an Additional Contribution or donate through your Donor-Advised Fund through Fidelity, Schwab, Vanguard, or a community foundation.
- Give a Gift Membership to friends, family, or colleagues.
- Consider supporting CharityWatch with a bequest by naming us in your will. Be sure to use our legal name, American Institute of Philanthropy, and include tax ID#33-0491030.
CharityWatch is a 501(c)(3) public charity. Donations to CharityWatch are tax-deductible according to applicable laws.
As the only independent charity watchdog organization in the United States, CharityWatch performs a critical role in keeping charities honest by exposing the truth to donors like you about how your donations are really spent. We are a small organization., and your support is noticed, needed, and greatly appreciated. Thank you so much for. your help. We couldn't do it without you.