OPINION:
Four billion dollars. It’s a gigantic sum with nine zeros, and it’s the amount Americans are expected to donate to charities on Giving Tuesday. It’s also a neon-bright invitation for scammers, fundraising mills, and charities that waste more than they spend on the programs they advertise. No one knows how much money they pull away from mission-driven nonprofits that squeeze goodness out of every dollar, but all signs point to a record year.
Low unemployment and a strong stock market suggest more of us can afford to be charitable. Digital wallets and the mainstreaming of cryptocurrency are attracting new generations of donors, and their social media feeds are ideal hunting grounds for unscrupulous fundraisers.
It’s difficult to think of a group that suffers more from this loophole in our national selflessness than military veterans. Many charities that pick up where the Department of Veterans Affairs stops are honest and efficient. Others are optimistic-sounding sinkholes that pull in more and more money for gigantic salaries, fundraising costs and other “overhead.”
This year, there’s a way to tell them apart: a dedicated ratings guide just for the 100 largest veterans charities. Together, they will collect more than $3 billion this year.
Most swindled donors have no idea that they have been taken. If you do find out your $25 went to an environmental group with a horrible track record, it’s easy to shrug your shoulders. Someone else can save that forest. International relief efforts can feel a world away. Curing a disease is a decades-long job. Those puppies will hopefully survive. You tried.
Veterans are never out of sight or out of mind. They live all around us. They have faces and families. Some have wheelchairs, chemotherapy and psychiatrists. Others have no jobs, no homes and no hope. That’s why Charities For Vets is so important. Its free simple ratings reflect a charity’s fiscal responsibility. The point is to help Americans minimize their future regret by steering dollars away from the worst of the worst.
Too often, we hear horror stories about lavish expenses and handcuffed executives. Each one seems to have a name full of bright sunshine, making it a Giving Tuesday retort to Black Friday’s dark commercialism.
Providing Hope VA in South Carolina is one. It paid its founder a $425,000 salary and funded a new swimming pool at his house, which he rented to the charity for $4,000 per month while he lived there free of charge. His sales pitches and lotteries yielded more than $9 million in three years by promising to build a new housing complex “where homeless veterans can find shelter, food, counseling and job skills training.”
It sounded so good that the South Carolina Department of Veterans’ Affairs announced a formal partnership with the group, but there was no building fund. CEO James Arehart never bought a single brick. His books also showed payments to his dog’s veterinarian recorded as “direct relief” for veterans. Arehart categorized salaries the same way. He got a 21-month federal prison sentence in March.
Providing Hope VA’s brazen pitch was ripped from a midnight animal welfare ad, minus the weepy Sarah McLachlan song. “More than 50% of homeless veterans suffer from serious mental illness and substance abuse problems. Soldiers who fought for our country are now being overlooked.” It’s only money. Cleanse your conscience.
More than 45,000 nonprofits tell the IRS that they serve veterans and their families. Which ones hide where their donors’ money ends up? It’s anyone’s guess how many are run by grifters with financial sleight-of-hand skills, but Charities for Vets is laser-focused on them. It blows the whistle on the fraudulent, wasteful, greedy and lazy. The complacent, too, like those that sit on gigantic endowments instead of spending it on America’s heroes.
The ratings are transparent and easy to grasp. Four simple metrics. No one gets partial credit for being halfway virtuous in some part of their operation. Pass all four tests or get a “Not Recommended” rating.
Spend at least 75% of your budget on veterans programs. Limit professional fundraisers to keeping 50% of what they bring in. Don’t let your cash reserves grow past three times your annual budget, and don’t hide your fundraising expenses by calling them “program” costs.
These shouldn’t be tough tests to pass, but 39 of the biggest veterans charities can’t do it. Paralyzed Veterans of America, for instance, spends 44 cents of every dollar on overhead. The Purple Heart Foundation is one of the worst: Seventy percent goes to the professional fundraiser that tugs on your heartstrings. The gold standard charities include the Fisher House Foundation, the Tunnel to Towers Foundation and Semper Fi & America’s Fund.
Will you invest five minutes before you click “pay” on Giving Tuesday? Denying money to fraudsters and scam artists is the best way to combine feeling good with actually doing good. America’s heroes are counting on you.
• Rick Berman is President of RBB Strategies and a board member of the RAM Veterans Foundation.
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