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You're on the Case! Help CharityWatch Investigate '?' Charities

   Dec 04, 2020

Wise donors like you turn to CharityWatch for ratings and quality reporting on wrongdoing in the nonprofit sector because you know we aren’t afraid to name names and hold charities accountable to their donors. Conducting a meaningful analysis of a charity’s financial activities is time-intensive and requires the expertise of qualified analysts who can compare tax form reporting against a charity’s more reliable audited financial statements. CharityWatch catches reporting errors, inconsistencies, governance issues, and questionable financial practices that other sources of charity information lack the expertise or interest to identify and address.

Unfortunately, sometimes we lack the information necessary to complete a meaningful analysis and must assign a “?” rating to a charity. In some cases, the “?” rating is due to a significant governance or financial issue that creates an obstacle to measuring its financial efficiency in a particular reporting year, such as a significant pending lawsuit or an investigation by a state charity regulator. But in other cases, CharityWatch could assign an “A+” to “F” letter grade rating to a charity instead of a “?” if those running the organization were willing to respond to our questions. That’s where you come in. Read on to understand how you can help. 

Religious Organizations

In most cases, charities claiming a religious aspect to their missions are not legally required to publicly disclose information that many other charities must report to the Internal Revenue Service (IRS) each year. Donors who want to know how such a charity spends its donations, compensates its employees, or even who sits on the charity's board of directors may be at a loss if the charity does not want to willingly open its books to outside scrutiny. If a religious group declines CharityWatch’s requests for information and is not required to file financial documents with the IRS or state regulators, it will receive a “?” rating with a religious exemption explanation on charitywatch.org.

Call to Donors: While charities claiming a religious aspect to their missions may have more limited reporting obligations, donors have the power to demand transparency from such groups as a condition of their donations. Do you want to know how charities rated "?" by CharityWatch due to religious exemption stack up against other groups? Ask such charities for complete copies of their most recent audited financial statements, including notes, and pro forma IRS Forms 990 if available, then forward these to CharityWatch for our analysis. In this way you can help us make charities more accountable for how they spend your contributions.

List of Charities With “?” Ratings Due to Religious Exemption


      Other “?” Rated Charities

      A quick online search for information about a charity will often produce pages of results, including efficiency pie charts circulated by the charities themselves, or “ratings” published by third parties who claim to measure the financial efficiency, transparency, governance, or program impact of hundreds of thousands of charities. In reality, these “ratings” are typically based on simple, computer-automated computations generated by pulling self-reported numbers from various fields of charity tax filings. Conducting a meaningful analysis of a charity’s financial activities is time-intensive and requires the expertise of qualified analysts who can compare tax form reporting against a charity’s more reliable audited financial statements, including transactions between a charity and its related organizations. CharityWatch catches reporting errors, inconsistencies, governance issues, and questionable financial practices that other sources of charity information lack the expertise or interest to identify and address.

      Call to Donors: Do you want to know how charities rated "?" by CharityWatch due to nondisclosure or specific concerns stack up against other groups? Consider asking one or more “?” rated charities to respond to CharityWatch’s questions then forward their responses to us for our review.


      Summarized below are some examples of the specific concerns CharityWatch analysts uncovered in our evaluations that led to our assignment of “?” ratings.

      350.org is an environmental charity with a mission to solve the climate crisis. Upon analyzing its fiscal 2018 financial reporting, CharityWatch became concerned that it may be overstating its program expenses and contributions for the year. Among these and other concerns:

      • In its IRS Form 990 tax filing, 350.org includes almost 99% of the $1,157,657 it reported spending on “Events & Materials” in its program expenses. If the activities that generated these expenses meet the IRS definition of “Fundraising Events,” they should instead be netted from related revenue rather than included in operating expenses, resulting in lower reported program spending for the year.
      • In its tax filing, 350.org reports spending $5,140,438 on "Consulting Services." This line item comprises more than one-third of 350.org's fiscal 2018 reported total expenses of $15,450,256, and the portion of this amount the charity claims are program-related expenses amounts to $4,713,283. This latter amount accounts for nearly 39% of 350.org's total program spending in fiscal 2018. Understanding what types of activities comprise these expenses is critical to any meaningful analysis of 350.org’s financial reporting, but the charity discloses very little in this regard.
      • In its tax filing, 350.org did not complete the schedule reconciling its IRS reporting to its audited financial statements. The charity reports grants and contributions of $19,128,157 in its tax form, but its audit reporting reflects $100,000 less than this amount, and no explanation of the discrepancy is provided.
      • 350.org's fiscal 2018 audited financial statements report as a subsequent event a "significant unaudited loss" that occurred during the fiscal year-ended 9/30/2019. The audit note does not describe the nature or amount of the loss, which could be a relevant factor for potential donors to consider.

      CharityWatch contacted 350.org via email and U.S. Mail in June and July 2020, respectively, with questions about its fiscal year ended 9/30/2018 financial reporting. On August 13, 2020, 350.org communicated in an email that answering CharityWatch’s questions is taking "longer than planned" and that they are "working on this." As of the time of publication, 350.org has not provided responses to CharityWatch’s questions.


        American Life League (ALL) has received a “?” rating from CharityWatch since its 2015 financial year. Among our ongoing concerns:

        • ALL reports in its 2018 IRS Form 990 tax filing that Virginia is the only state with which a copy of that form is required to be filed. However, since at least March 2018, the Virginia Department of Agriculture and Consumer Services website has reported ALL's Registration Filing Status as: "Organization is not authorized to solicit in Virginia (pending)." On the “WAYS TO DONATE” section of its website, ALL states that it welcomes “any donations by mail or by phone,” and lists additional ways to donate, including making an online donation, or donating stocks, bonds, real estate, or matching gifts. ALL reports raising over $3.6 million in contributions in 2018, according to its tax filing.
        • ALL reports its revenues and expenses based on when cash flows in and out of the organization (cash basis) rather than the more typical accounting method used by nonprofits of ALL’s size (accrual basis). The latter method reports revenues and expenses when earned and incurred, respectively, complies with Generally Accepted Accounting Principles (GAAP), and is less susceptible to manipulation that can be caused by the timing of cash deposits or payments.
        • In its 2018 tax filing, ALL reports for Business Transactions Involving Interested Persons a transaction with Anthony Kane and Associates for "printing and mailing services," with the relationship reported as "board of director is owner." ALL left blank the "Amount of transaction" field on the schedule, and reports no supplemental information about the transaction. In its 2015 tax filing, ALL reported a similar transaction with Anthony Kane and Associates for "printing and mailing services" in the amount of $1,862,208.

        CharityWatch has contacted ALL three times since 2016 to request a copy of its most current IRS Form 990 and audited financial statements, most recently in June 2020, and ALL has not responded to our requests. Though ALL reports in its 2018 Form 990 that its financial statements were audited by an independent accountant, we have been unable to locate a copy of this document from public sources. CharityWatch's most recent letter grade rating for ALL was a "D" based on a Program Percentage of 53% and a Cost to Raise $100 of $48 for its fiscal year 2014.


        CDC Foundation, also known as the National Foundation for the Centers for Disease Control and Prevention, receives a "?" rating from CharityWatch for its fiscal year ended 6/30/2019. CharityWatch contacted the organization via email and U.S. Mail in June and July 2020, respectively, with questions about its financial reporting. Among our concerns:

        • A $1,408,214 discrepancy exists between the $16,625,343 of “Government grants (contributions)” reported in its IRS Form 990 tax filing, and the $15,217,129 in “Direct Federal grants” reported in its audited financial statements. While CDC Foundation may have reasonable justification for differences in line item reporting between its tax filing and audit, it did not provide one to CharityWatch when asked.
        • The charity reports $11,859,039 in “Indirect cost recovery” revenue in its audited financial statements. Indirect cost recoveries typically consist of funds paid to a charity by the government to cover certain overhead costs a nonprofit incurs related to fulfilling the terms of a government grant. In order to compute a valid fundraising efficiency ratio for CDC Foundation, a determination must be made as to whether this reported revenue should be treated as a contribution or as revenue received in exchange for services provided (program service revenue).

        As of the time of publication, CDC Foundation has not responded to CharityWatch’s requests for a reconciliation of government grants reported in its tax filing and audit, or for a description of the activities included in its reported indirect cost recovery revenue.


        Crisis Relief Network / Child Watch of North America (CRN) receives a “?” rating from CharityWatch due to our concerns that it appears to be allocating significant professional fundraising and related expenses to its reported program spending. CRN also lacks an independent governing body to help ensure that operating decisions are being made in the charity’s best interest. We analyzed CRN’s 2018 IRS Form 990 tax filing, audited financial statements, and annual registration filings in select states. CharityWatch identified multiple fundraising campaigns conducted by professional fundraisers on behalf of CRN for which CRN received either only 10% or 12% of the gross donations raised during periods that included 2018. Among these and other concerns:

        • In its tax filing, CRN reports that its total 2018 program expenses of $2,108,333 consisted of: $239,165 for Case Management; $545,842 for Poster Distribution; and $1,323,326 for "Spreading the word about the services offered for free to the public..." In its 2018 audit, CRN reports spending $549,545 on "Marketing and promotions" and $1,091,986 on "Printing, publications and postage." CharityWatch is concerned that these expenses, which comprise approximately 78% of CRN’s reported total program spending for the year, may include fundraising expenses and/or joint cost fundraising activities.
        • According to CRN’s 2018 audit, Note 6, Related Party Transactions: "During 2018, the executive director had an employment agreement with [the] organization that was approved by the Board of Directors. The executive director also provides contractor services as a therapist. The executive director is related to members of the Board of Directors through family relationships." In its 2018 tax filing CRN reports a Board of Directors consisting of five people. Of these five, only two are reported as independent. Don Wood (CEO), Brandon Wood (president), and Bridget Wood (executive director), share the same last name, and all are reported as “related parties.”

        In addition to fundraising under its legal and doing business as (dba) names, CRN solicits under multiple other names. These include: Breast Cancer Relief Network, Childhood Abuse and Trauma Foundation, Children's Cancer Relief Foundation, Disabled Children's Relief Foundation, and Veterans Trauma Support Network.


        National Rifle Association (NRA) and National Rifle Association Foundation (NRA Foundation) each receive a “?” rating from CharityWatch due to our concerns related to their respective governance practices which may impact the reliability of the organizations’ financial reporting. NRA and NRA Foundation are currently under investigation by the offices of the New York and District of Columbia attorneys general, as further described in our article: NRA and NRA Foundation Facing Lawsuits—NY AG Seeks to Shutter NRA; DC AG Accuses NRA Foundation of Misusing Charitable Funds to Support NRA’s Wasteful Spending.


        Paws for Purple Hearts (PFPH) may be including fundraising expenses in its reported program activities and inflating its program accomplishments in the process. CharityWatch contacted PFPH’s chief operating officer in 2018 and 2019 with questions about variances in its 2017 financial reporting compared to prior years. In October 2018, PFPH told CharityWatch that it was working to provide us with "thorough responses,” but when we followed up in early 2019 the charity stated that it is "going to have to decline the opportunity to provide a detailed response." CharityWatch’s most recent letter grade rating of PFPH is an "F" based on its 2015 fiscal year in which it spent only 26% of its budget on programs and $44 to raise each $100 of contributions. We have since assigned PFPH a “?” because:

        • PFPH reported significantly higher expenses for “Postage” and “Printing and copying expenses” in 2017 and 2016 as compared to prior years, and allocated almost 60% of its “Mailing lists” expenses to program services in 2017. Such variances are often an indicator that a charity has engaged in joint educational/fundraising campaigns, which would require it to provide additional breakouts in its tax form. These activities, known as joint costs, often consist of direct mail solicitations that include an educational component and a call to action. The aggregate of the three aforementioned expense line items make up almost 30% of PFPH’s reported total program expenses in 2017. In contrast, they comprised 17% and 23% of total program expenses in 2015 and 2016, respectively.
        • PFPH allocated $540,804 in “Professional services” to program expenses in 2017. We noted that “Professional services” comprised less than 5% of the charity’s reported total program expenses in 2015, but that proportion increased to 12% in 2016 and 14% in 2017 without explanation.


        Veterans Community Project (VCP) is a charity that provides transitional housing to veterans in an effort to eliminate homelessness. CharityWatch contacted VCP in February 2020 to request copies of its IRS Form 990 tax filing and audited financial statements. As of the time of publication, VCP has not responded, but CharityWatch did acquire copies of the charity’s recent tax filings from public sources. Among our concerns upon reviewing these documents:

        • In its 2018 tax filing, VCP does not check the box to indicate that an independent audit was conducted that year. This is unusual for a charity of VCP’s size—it netted nearly $3 million in cash contributions in 2018. If it is the case that VCP solicited donations only in its home state of Missouri that year, an audit may not have been required to comply with state law. Whereas, if VCP solicited donations nationally, it likely did so in violation of various state charitable solicitation laws.
        • In its 2017 and 2018 tax filings, VCP leaves blank the fields designated for a response to the following question: “List the States with which a copy of this Form 990 is required to be filed.” Forty-one U.S. states and/or jurisdictions require charities to register as a condition of being allowed to solicit charitable contributions within their borders. Many of these states require a copy of a charity’s IRS Form 990 to be included as part of meeting filing requirements. As of the date of publication, CharityWatch has been unable to locate a copy of VCP’s audit or Form 990 in the public databases of state charity regulators, calling into question whether VCP is properly registered to solicit donations in one or more jurisdictions.

        A meaningful analysis of a charity’s financial operations is often time-intensive and requires the expertise of qualified financial analysts with specialized knowledge, skills, and experience in nonprofit reporting and accounting. We hope the examples of our work outlined in this article have inspired you and other donors to be cautious about taking a charity’s claimed accomplishments or financial efficiency at face value. As we are able to obtain the necessary financial reports and other information from the charities cited in this article regarding our concerns, we will update their ratings accordingly. As appropriate, we will also post updates within this article to indicate when a charity’s rating or other relevant information has changed.   

        For more information about the work that goes into CharityWatch’s “A+” to “F” charity ratings, please visit the Our Process page. To better understand how CharityWatch’s ratings differ from other sources of charity information, please read The CharityWatch Difference. Thank you for making the extra effort to give wisely by reading this and other CharityWatch articles, and for checking our charity ratings prior to making your donating decisions.

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