OPINION:
I have recently heard the term “waste, fraud and abuse” so often that I am tempted to type it as one word. Although it has most recently been linked to federal government spending tax dollars, much of this is happening in the charitable giving and scam space.
Have you ever been solicited for contributions to the police through a robocall? I can’t speak to the many local appeals. Still, the American Association of State Troopers, the National Association of Chiefs of Police and the United States Deputy Sheriff’s Association all receive “F” ratings from Charity Watch (subscription required) despite their official-sounding names. Fake GoFundMe stories, with heartrending stories, are often linked to natural disasters. Where there’s a crisis, there’s an opportunity to scam, and we have had plenty of them. In Los Angeles, the police offer tips and resources to avoid wildfire relief scammers. Three of the most prominent rip-offs include contracting, towing and charitable donations.
I’ve written about this problem extending to veterans charities, with tax returns and state attorneys general revealing poor management records (go to www.charitiesforvets.org to see some of the worst scams). Some groups spend over 50% of their multimillion-dollar budgets on overhead despite others staying under 10%.
In California, the Greater Los Angeles Veterans Research and Education Foundation touts its role in “scientific discovery” for veterans’ health care. Yet nearly 60% of its expenses are executive compensation and other salaries and wages.
Blue Skies of Texas spends over 77% of its budget on overhead, similar to that of the Disabled Veterans National Foundation, which spends 77% of its $30 million budget on overhead.
These charities have received “Not Recommended” designations from the RAM Veterans Foundation, which identifies 42 “Not Recommended” charities through its free database. While a group such as Paralyzed Veterans of America may receive an 84% rating from Charity Navigator, it fails to pass more stringent tests from Charities for Vets and CharityWatch. This points to another problem for donors: The rating umpires don’t call balls and strikes using a consistent point of view.
More than 45,000 U.S. charities claim to benefit veterans. Some groups that collect hundreds of millions of dollars operate big marketing schemes, but there is no Federal Trade Commission to punish bad actors for deceptive marketing. The IRS gives out nonprofit status with little oversight after certification. The devil is in the details when an organization claims to support homeless veterans.
Veterans Inc. claims to provide up to 30 days of emergency shelter and even up to two years in some instances. Not surprisingly, Veterans Inc. spends over 96% of its $20.3 million budget on actual programs, receiving a “Highly Recommended” rating from Charities for Vets. The program-focused Tunnel to Towers is just as highly recommended, and it also received an A+ rating from CharityWatch.
Other organizations are less forthcoming with their results. If a group provides counseling, is there a verifiable record of successes? Even if a charity efficiently manages money, can that group prove they are effectively making a difference?
The bully pulpits of the Defense Department and the Department of Veterans Affairs have roles to play in highlighting the veterans’ charities that waste money with little accountability for donors. Defense Secretary Pete Hegseth has been outspoken on various foreign policy issues. He should consider a closer-to-home problem: veterans charity abuse.
Americans donate billions of dollars annually to veterans groups. This is a huge number, so we should not just assume that those funds are properly managed.
• Rick Berman is president of RBB Strategies and is on the board of the RAM Veterans Foundation.
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