OPINION:
With Christmas season soon upon us — though the TV ads would have us think it’s already here — we will see a surge in charitable donations as Americans look to spread the holiday cheer and help the less fortunate. If the past is any indication, however, there are more than a few grinches and louses who are licking their lips at the chance to put some of that money in their own pockets.
An analysis of a few dozen military, health and animal charities poorly rated by CharityWatch finds that these groups spend $3.5 billion on overhead costs. Billions more are wasted or mistakenly given to fraudsters every year.
But there’s no clear figure on how much money is being sucked up by all bad charities. Why?
In part, it’s due to attorneys general who are either underfunded or (in the case of a few notable left-wingers) more interested in spending resources on political grandstanding.
In part, it is also because some consumer watchdogs are asleep at the watch. The Better Business Bureau (BBB) Wise Giving Alliance, for instance, allows charities to classify millions of dollars spent on overhead as “program” expenses — an accounting game that allows many charities that waste money to instead look starkly efficient. (The BBB, which has suffered from other rating deficiencies, takes money from charities it accredits. It has an obvious conflict and incentive to make sure its standards aren’t too tough.)
That’s why the Federal Trade Commission should get into the game more aggressively. The FTC is empowered to go after deceptive practices by businesses that harm consumers, and charitable dollars are often raised by for-profit entities.
The agency should be looking into the Humane Society of the United States (HSUS).
The Humane Society of the United States raises more than $100 million a year. It does so by deceiving the public about how their donations will be used.
You’ve seen the TV ads — the ones with the sad piano music, the woman on the couch with the dog, the homeless cats and dogs. What those ads don’t tell you is that the Humane Society of the United States doesn’t run a single pet shelter. Only 1 percent of the money raised is given to local humane societies which, despite the similar name, are not affiliated with HSUS. According to its tax returns, HSUS puts more money in its pension plan than it gives to pet shelters.
Instead, the organization funnels millions into lobbying attacks on farmers, ranchers, hunters, circuses, zoos and aquariums.
It’s classic bait and switch. And the FTC has acknowledged receiving voluminous complaints about HSUS.
HSUS would be low-hanging fruit, but charity waste and abuse is a target-rich environment. Former Democratic Rep. Corrine Brown is facing years in prison for using a charity as a slush fund. Another veterans charity, VietNow National Headquarters, recently agreed to shut down and disband following an investigation into misleading solicitations; the group had spent nearly all of the money it raised on professional fundraisers and administrative costs. This follows a CNN investigation into a different veterans charity that discovered the group had squandered tens of millions on fundraisers as well as irrelevant supplies like M&Ms.
Even household names aren’t immune: Last year the Wounded Warrior Project was outed for using donor money on five-star resorts. The charity’s board eventually cleaned house, but it took negative press and whistle-blowers to do it — all the more reason for officials to look at increasing oversight.
Moreover, given the hundred-million-dollar budgets and the charity C-suites, the line has clearly blurred between “nonprofit” and “for-profit.” We spend lots of resources making sure businesses play by the rules. Wouldn’t it be nice if more resources were spent making sure charitable dollars were used as donors intended?
• Richard Berman is the president of Berman and Company, a public affairs firm in Washington, D.C.
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