Monday, December 22, 2008

Ten Ebeneezer Charities

Charities to avoid this holiday season:

While we urge you to assist charitable organizations whichever way you can this holiday season, it is an unfortunate reality that there are organizations (and non-profit leaders) with only their own best interest at heart, and not the people or causes they are beholden to assist.
While we do not rate the organizations listed below, either because they do not meet our criteria, or because we do not trust their data, it will be a wise decision to stay away from them all the same.

As you read this list, it is helpful to keep in mind how most public charities in America perform. Of the three and four star rated charities on our website:

74% spend less than 10% of their budget on fundraising costs
84% spend less than 15% of their budget on administrative fees
86% spend at least 75% of their budget on the programs and services they exist to provide
On average, these charities spend just 9 cents to raise one dollar in contributions.

In addition, most charities in America adhere to good practices and thus do not have paid relatives on their boards or staff. And, in all honesty, the typical charity in America has not been the focus of a criminal investigation.

1) ABC Humanitarian Trust
The Minnesota Attorney General's office filed suit against ABC Humanitarian Trust in 2007 due to the fact that no charitable activities were conducted with the proceeds of vehicle donations to this 501(c)(3) organization. The Attorney General's office alleges the Trust is running a used-car business and not a charitable organization. The organization also does not have a board of directors, its only officer and director is Sandra Belisle, who is named in the suit. The Foundation does not hold board meetings, and does not keep any accounting records.

2) California Organization of Police and Sheriffs
Even though endorsed by Governor Arnold Schwarzenegger on its website, COPS, a 501(c)(5) organization spends a dismal 18% of its budget on its programs, while also using aggressive professional fundraisers that try to pressure potential donors into making a contribution.

3) Firefighters Support Foundation
The Foundation, a 501c3 organization, uses professional fundraising organizations to solicit funds for it, but does not offer any way for donors to donate directly to the organization, and donors are not able to earmark their donations for any specific department. No financial information for the Foundation is available at this point, but the main professional fundraiser used on average sends only 13% of donations raised back to the organizations they were intended for.

4) Firefighters Support Services
This fairly new 501c3 organization has been linked to aggressive phone solicitations via a professional fundraiser, yet has not reported any contributions on it most recent tax return available. In fact, the only revenue reported comes from loans to the organization by its President and CFO. During this same time period, the organization's only expenses were for attorney, state and federal fees.

5) Foundation for Supporters of the Disabled and PSCH, Inc.
Ralph Farkas, Founding Executive Director of PSCH, Inc. resigned from his position in January, 2008. This in response to an investigation by the New York Attorney General’s office into the working of PSCH, Inc. and its non-profit fundraising arm, The Foundation for Supporters of the Disabled. The investigation uncovered that the Foundation benefitted Mr. Farkas, but not the disabled. Board members approved compensation packages out of line with the size of the organization. In addition, no funds raised by the Foundation ever reached PSCH. In fact, during an eight year period, only three $10,000 grants were awarded to other non profit organizations.

6) Homecare Workers Training Center
Tyrone Freeman, who founded Homecare Workers Training Center in 2000, has been accused by former employees of forcing them to partake in campaign efforts for political candidates, activities forbidden due to the nonprofit's tax exempt status.

7) Hope Cancer Treatment Foundation
The Hope Cancer Treatment Foundation came under investigation of the Attorney General recently. The unregistered Foundation was ordered to pay retribution to donors that bought tickets to a ‘Black and Gold Bash’ that was supposed to help victims of cancer by raffling of Pittsburgh Steelers memorabilia. In addition to having the repay almost $270,000 in purchased tickets, President Robert Connell was also ordered to refrain from running any other charitable organizations. The Hope Cancer Treatment Foundation has been ordered to close and dissolve within the next couple of months.

8) Joe Pollock Hill Country Fund
The Fund, which ran a 'Brown Santa Toy Drive' under leadership of Burnet County Sheriff Joe Pollock, is slated to close December 31, 2008 according to Mr. Pollock, who lost a bid for re-election, and leaves office on that day. The Fund is now being investigated by the Texas Attorney General's office under the suspicion that toys and funds are missing.

9) People Against Drugs Affordable Housing
This 501(c)(3) organization is currently being investigated by the Attorney General's office. The agency is charged with illegally using charitable funds to support the Founders salary, support a NASCAR Truck series team, and advance the Founders' political career. Analysis of the most recently available tax return (no returns have been filed since 2005) shows that the largest program expense is for 'race parts'. We are not exactly sure how race parts tie in with the purported mission of 'providing and supporting drug free housing to qualifying low income individuals’. Founder Gene Christensen received $181,000 for his troubles during that year.

10) Upper Des Moines Opportunity
This 501c3 organization is currently being sued by its former executive director, Nancy Schmitz, who claims she was fired by the organization after uncovering financial misconduct. According to the lawsuit, Ms. Schmitz alerted the Iowa organization to improper loans. The state auditors office uncovered federal grant money had been used to supply the loans, in violation of the grant guidelines. The loans have not been explained on the organization's tax returns.

Note: Thanks to Program Analyst Leonie Giles for compiling all of this information!

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