After conducting a four-month investigation, WTVF, a Nashville television station, recently reported that it had secretly videotaped Feed the Children’s (FTC) Nashville front office “from the executive director on down” regularly taking boxes of donated goods. WTVF reported that “even family members [of FTC staff] got in on the action.” Warehouse workers, who tipped off WTVF about the alleged thefts, told that station that they saw staff takes boxes they believed were intended for Kosovar Refugees and Oklahoma Tornado Victims. The Associated Press reported that Tennessee Bureau of Investigation agents had raided the charity’s Nashville office and the homes of six administrative employees producing boxes of shoes, videos, blankets, food and other goods they believe were donated for the needy. “Merry Christmas to me” was written on one box according to the AP.
Steve Highfill, who was recently replaced as director of the Nashville center, one of FTC’s two U.S. distribution centers, told WTVF: “If they're taking stuff home and giving their little brother a pair of shoes or some food, I don't have much to say about that. If that’s wrong, fine. I don't think so and I don't think people are going to think so.” Larry Jones, founder and president of Feed the Children, responded later at a press conference by saying: “Donated items are not perks for employees. The executive director was not acting with my authority or approval with the decisions that he made regarding the employees taking donated items, and he was not acting in conformance with company policy.” FTC has temporarily closed its Nashville center and laid off all of its staff.
FEED THE CHILDREN
Questions remain about whether staff members at FTC’s Oklahoma City headquarters knew about the alleged employee pilfering. According to WTVF, Nashville warehouse workers were apparently ignored when they called the Oklahoma headquarters several times in December and January to report that administrative employees were using the warehouse as a personal shopping mall. Emilee Truelove, a FTC spokesperson, told AIP that she could not confirm or deny whether FTC received such calls. In response to the allegation that such calls were ignored, Mr. Jones told the Associated Press, “I hope our investigation brings that out because that’s new to me.” He also told the AP that he had hired investigators after learning that some Oklahoma City workers were taking goods, and those workers were subsequently arrested and prosecuted.
Ms. Truelove told AIP that Larry Jones learned in April that warehouse employees had a tape of alleged warehouse thefts, but that they had not sent it to him as he had requested.
EFFICIENCY, ACCOUNTABILITY AND FAMILY TIES
Feed the Children receives an “F” grade from AIP because in our opinion it spends only about 14% of its cash budget on program services that are not conducted in conjunction with fundraising. In fiscal 1998, FTC spent almost $13 million on television programs and almost $12.9 million on direct mail and postage. These two items account for about 70% of its $37 million cash budget. FTC, whose primary purpose is to distribute donated goods and supplies to the needy, spent only $944 thousand, or less than 3% of its cash budget, on shipping, handling and storage in fiscal 1998.
Feed the Children distributed $140 million of donated goods in fiscal 1998. About 23% of this amount was for “food and child care items.” (Note: FTC changed this category in fiscal 1998 from “food and grains.”) FTC distributed far more dollars worth of “Medical, dental and optical supplies” and “Other materials and services” than food in fiscal 1998.
Feed the Children appears to have an accountability problem. In the past it has not received “open book” status from AIP because it has failed to send us requested documents. Since the recent warehouse problems were exposed, however, FTC has said that it will comply with AIP’s document requests. FTC, also known as Larry Jones International Ministries, Inc., is not a member of the Evangelical Council for Financial Accountability, which requires that its members uphold standards for financial accountability, ethics and reporting.
FTC owns a for-profit trucking company that is headed by Larri Sue Jones, Larry Jones’ daughter. (She is also Legal Counsel for FTC.) This is of concern to informed donors since for-profit companies are not required to publicly disclose their financial statements. It is also not clear why FTC should be in the for-profit trucking business unless it can demonstrate that it can ship the charity’s donated goods more efficiently than outside transportation companies. Ms. Truelove told AIP that “Larry Jones created an empire from the ground up” and that he set up his own trucking company because he does not want to rely on outside people. She said that the trucking company was set up as a for-profit so that its trucks could bring back loads after making shipments of donated goods. She also said that none of the Jones family receives pay or benefits from FTC’s for-profit trucking firm. Larry Jones, his wife Francis Jones, who is Executive Vice President of FTC, and his daughter Larri Sue Jones together received compensation, benefits, expense accounts and other allowances totalling nearly $269,000 in fiscal 1998, according to FTC’s fiscal 1998 IRS Form 990.