Nobody wants to hear that the money they donated to a charitable cause has gone to waste, but that happened on a massive scale last spring when the Federal Trade Commission charged 4 cancer charities with fraud.
The Breast Cancer Society Inc., the Children’s Cancer Fund of America, Inc., Cancer Support Services Inc., and the Cancer Fund of America, Inc. allegedly spent over $187 million on Disney World trips, luxury cruises, concert tickets, and college tuition for board members’ friends and family.
Less than 3% of the money these organizations raised went to cancer patients and research.
“The defendants’ egregious scheme effectively deprived legitimate cancer charities and cancer patients of much-needed funds and support,” said Jessica Rich, the director of the Federal Trade Commission’s Bureau of Consumer Protection.
The TFC proposed a settlement of $135 million between the 4 charities, but they fear that since most of the money has already been spent, there will not be many assets left to recover.
In response to the FTC’s charges, Breast Cancer Society Inc. executive director James Reynolds II has maintained his innocence, blaming a litigious government for the allegations.
“The vast majority of money raised for breast cancer causes are spent to fund research,” Reynolds wrote in a letter on his website. “Charities — including some of the world’s best-known and reputable organizations — are increasingly facing the scrutiny of government regulators in the U.S.”
The possibility that such outrageous behavior may go largely unpunished can be shocking and frustrating to those wishing to donate to a good cause, but charity fraud is more common than you might think.
Many donors might not be able to tell the difference between the Children’s Charity Fund and the Children’s Defense Fund, for instance. However, according to Charity Navigator, a website that evaluates charities, the Children’s Defense Fund is a top tier 4-star rated organization, whereas the Children’s Charity Fund is a 0-star charity that puts only 9.1% of its funds towards charitable programs.
If you are considering a donation to any charity, check out one of the 3 major ratings sites first. CharityWatch, Charity Navigator and the BBB Wise Giving Alliance evaluate organizations’ financial statements, tax forms and other documents in order to help donors select the best charities for any given cause.
To minimize the possibility of wasting your donation on a fraudulent organization, never agree to a donation over the phone, avoid sound-alike names like the Children’s Charity Fund, and always do your research before giving.
Sources: “Criteria and Methodology,” CharityWatch.
Anand, Priya, “Cancer charities accused of spending $187 million in donations on dating sites, trips to Disney,” MarketWatch, 23 May 2015.
“Top 10 Best Practices of Savvy Donors,” Charity Navigator.