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VETERANS CHARITY USING QUESTIONABLE
FUND-RAISING
METHODS -- The foundation's sales pitch appears
to be an
attempt to conceal from would-be donors how
little of
their contributions would actually benefit
veterans.
Story here...
http://www.boston.com/
business/personalfinance/articles/20
07/06/24/fund_raisers_questionab
le_claims_prompt_reminder
_for_cautious_giving/
Story below:
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Fund-raisers' questionable claims prompt
reminder for cautious giving
By Bruce Mohl, Globe Staff
The Veterans Charitable Foundation is making a patriotic fund-raising
pitch to many Massachusetts residents: 100 percent of every donation
goes directly to help veterans with wheelchairs, medical equipment, and
family aid.
But the pitch has a fatal and possibly illegal flaw: It's not true.
The fund-raising calls are being made by a Florida for-profit
corporation that is pocketing most of the money. The foundation's most
recent tax filing indicated it raised $118,000 in 2005 and donated only
$3,120, or just 2.6 percent of the total, to seven Veterans
Administration hospitals and medical centers. Nearly $98,000 went for
fund-raising expenses and $14,000 for management costs. From 2002
through 2005, the average amount donated to the charity's programs as a
percent of total revenue was 7.7 percent.
The foundation's sales pitch appears to be an attempt to conceal from
would-be donors how little of their contributions would actually benefit
veterans. There are no laws mandating how much a charity should spend on
program services, but watchdog groups say nonprofits should devote at
least 30 to 40 percent of their budget on programs and services.
"They're playing on your patriotism, on your willingness to help the
poor returning veteran," said Vic Hamburger of Westborough. "It's about
as sleazy as you can get."
Hamburger said the fund-raiser who called him told him 100 percent of
his donation would go to the foundation's cause. Hamburger said the
fund-raiser also told him he had given to the foundation the previous
year, but his tax records indicated he hadn't.
John Leonard of Hingham said he specifically asked the person calling on
behalf of the Veterans Charitable Foundation whether he was working for
a contracted fund-raising organization. He said the person told him it
was an all-volunteer effort with all the money going to veterans.
Leonard became suspicious and contacted the Globe.
I heard the same pitch myself when a fund-raiser called me at home. Even
after I told the caller that I knew the charity's fund-raising was being
handled by a for-profit company, he denied it. He referred me to the
charity's website, vcfusa.org. On the website, president Frank Cariello
of Boynton Beach, Fla., acknowledges using professional fund-raisers.
Such fund-raisers are not allowed to mislead potential donors. The
Massachusetts attorney general's office, which regulates charities and
professional fund-raisers, publishes a guide that warns legal action may
be warranted if fund-raisers fail to disclose that they are
professionals, misrepresent the percentage of funds that will be used
for charitable purposes, or reference a prior pledge when none was made.
Cariello, in a telephone interview, said 100 percent of the donated
money does go to the charity, but only after his hired-gun telemarketers
cover their expenses. He said he and the other members of the
foundation's board take no salaries. He said he got into charity work
because many of his friends are veterans.
Cariello said his telemarketers are supposed to follow a script when
soliciting donations. "Sometimes they try to make a sale so bad they say
things they shouldn't," he said.
Cariello said the foundation's 2005 tax filing understated spending on
programming because of a bank mix-up toward the end of the year. He said
foundation contributions to the voluntary service operations of Veterans
Administration hospitals were higher in previous years and have
increased recently.
Tax filings for 2002 through 2005 indicate the foundation raised a total
of $464,762 over the four-year period and allocated only about $36,000,
or 7.7 percent, to program services. The current contract between the
foundation and its Massachusetts telemarketer, CMR Marketing Group of
Medford, indicates its year-long campaign is expected to raise $98,000,
of which 82 percent will go to the fund-raiser and 18 percent to the
charity.
Officials at CMR said the company's telemarketers are paid $8 an hour
whether they secure a contribution or not. The officials said some
volunteers make calls and pick up checks from donors.
"We are not the only charitable organization in Massachusetts, but we
are the only ones that continue to support the VA hospitals here," the
officials said in a written statement faxed to the Globe.
Ralph Marche , director of voluntary service and recreational therapy
for the Boston-area Veterans Administration hospitals, is pictured on
the foundation's website receiving a check. Marche said the foundation
has donated two $1,000 checks and a third check in the $5,000 to $10,000
range. He said other groups also donate money.
Marche said individuals could make donations directly, which would
ensure that none of their money is siphoned off to telemarketers. He
said donations are used to purchase services and equipment the Veterans
Administration cannot buy, including recreational equipment, TV sets,
bedside phones, and clothing.
Tax filings indicate veterans' charities are similar to police and fire
charities in that they tend to rely more on telemarketers for
fund-raising. The high cost of telemarketing fund-raising means there is
less money left over for the charity's stated purpose.
A Globe survey of the most recent tax filings of veterans charities
indicated the amount of money going to services varies dramatically. For
example, Amvets Boston said 83 percent of the $59,000 it raised went to
services, while the figure was 67 percent at the Boston-based New
England Shelter for Homeless Veterans, which raised $5.1 million.
By contrast, only 14 percent of the $5.4 million raised by the National
Veterans Service Fund of Darien, Conn., actually went to program
services. Only 13 percent of the $722,000 raised by the Tennessee-based
American Ex-Prisoners of War Service Fund went to programs.
Laurence Fitzmaurice , chief executive of the New England Shelter for
Homeless Veterans, said his organization doesn't raise money exclusively
through telemarketing, which is very expensive. Using telemarketing, he
said, costs the shelter about 50 cents to raise a dollar. He said the
shelter is trying to reduce that cost to 40 cents.
Sandra Miniutti , a spokeswoman for Charity Navigator, a New
Jersey-based watchdog group, said it gives a zero rating to any
nonprofit that spends less than a third of its budget on programs and
services. Of the 5,200 charities rated by Charity Navigator, she said,
70 percent spend at least 75 percent of their budgets on programs and
services.
She urged consumers to be very cautious in dealing with charities
calling for donations. She said consumers should ask who is calling them
and where their money will go, and then hang up and do more research.
Charity Navigator and the Better Business Bureau (Give.org) both
evaluate charities and Guidestar.org provides the most recent tax
filings of nearly all charities.
"We always tell donors to send their check directly to the charity and
not go through a middleman," Miniutti said.
Bruce Mohl can be reached at
mohl@globe.com.
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Larry Scott --
