By MARSHA MERCER
Outside the supermarket, a woman sitting at a card table
says she is collecting food for needy families with children.
I don’t recognize the name of her group and she’s
vague about where the food is going. But she’s friendly and seems sincere, so I
buy an extra can of baked beans. More generous shoppers than I stuff dollars in
her jar. I hope she’s on the level and go about my day.
How many times do we have such conflicting thoughts
and emotions? At every turn, we’re asked to give. We know people are hurting,
we want to help -- but we don’t want to be stupid. In my case, the financial risk
was minuscule, but too many kind-hearted souls contribute real money to bogus
charities.
There must be a special circle of Hell for charity
scammers who dupe unsuspecting donors. In this world, though, we rely on
government to punish the wicked.
In an unprecedented sign of nationwide resolve, all
50 states and the District of Columbia joined the Federal Trade Commission May
18 and accused four charities of fleecing more than $187 million from
unsuspecting donors from 2008 to 2012. The charities, all with cancer in their
names and run by family members, allegedly used almost none of the money they
raised for cancer patients for patients.
The charities claimed donors’ contributions would
“provide pain medication to children suffering from cancer, transport cancer
patients to chemotherapy appointments, or pay for hospice care for cancer
patients,” according to the complaint filed in federal court. “These were lies.”
None of the groups even
had programs to provide pain medicine to patients. None transported patients to
chemotherapy and none paid for hospice care.
Calling the groups “sham charities,” the complaint
says almost every penny collected actually paid for-profit fundraisers and enriched
the small group that ran the charities.
The funds donors intended for cancer patients
instead bought cars, dainties from Victoria’s Secret, meals at Hooters, and “training
trips” for employees and their families in Disney World and cruises of the
Caribbean. Donations went for personal loans and paid for college tuition, gym
memberships, Jet Ski outings, dating Website subscriptions and tickets to
concerts and sporting events.
Less than 3 cents of every dollar collected went to
cancer patients in cash and goods, the complaint states. “Comfort boxes” for patients included mostly overstock items, Carnation
Instant Breakfast, Little Debbie Snack Cakes and later Moon Pies.
Under terms of a proposed settlement agreement,
Children’s Cancer Fund of America and the Breast Cancer Society agreed to shut
down, and three principals will be banned from fundraising and other charitable
management activities. Litigation will continue against Cancer Fund of America,
Cancer Support Services and founder and president, James Reynolds Sr., the FTC
said.
It’s no easy task keeping track of charities. In
2012, there were about 1.6 million nonprofits registered with the Internal
Revenue Service. Individuals gave roughly $240.6 billion to charities in 2013,
according to Giving USA.
Almost every major disaster and tragedy generates a
new wave of scam artists. State and federal regulators simply can’t keep
up.
In case you’re thinking that sham charities are a modern
phenomenon, think again. Former President Grover Cleveland warned in 1906 that
people might be discouraged from giving to responsible charities because of
fraudulent schemes. He suggested the creation of an agency to test charities
and provide “reliable guidance” to donors.
Fortunately, today several organizations do just
that, including the Better Business Bureau Wise Giving Alliance, Charity
Navigator, Charity Watch and GuideStar. The FTC has good advice on its Charity
Scams page.
Consumers should know that many sham charities have
names strikingly similar to reputable ones. Beware of appeals that tug at
heartstrings with diseases like cancer and the suffering of children, police,
firefighters and veterans. Ask questions; legitimate groups should provide
information on how they spend donations.
And I learned this: “Wise donors don’t drop money
into canisters at the checkout counter or hand over cash to solicitors outside
the supermarket,” Charity Navigator advises in Top 10 Best Practices of Savvy
Donors.
We all have a role to play in stopping sham
charities. Now more than ever, it’s important to be generous -- and smart.
©2015 Marsha Mercer. All rights reserved.
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