OPINION:
Next month, Americans will celebrate the sacrifices made by the U.S. military on Memorial Day. The appeals from veteran charities will inevitably increase, as will the donations to these groups.
But not all charities deserve people’s donations. Our country is, unfortunately, littered with bad charities.
What qualifies as a bad charity? A nonprofit organization that promises one thing and does another. Bad charities are notorious for using donations to cover overhead costs that have nothing to do with achieving their stated goals — from helping veterans to feeding the hungry or clothing the poor. The worst charities may spend 90% (or more) of their resources on covering overhead and funding bureaucracy — too often self-enrichment over selflessness.
The examples are legion. The Autism Spectrum Disorder Foundation — which supposedly helps autistic children and their families — reports overhead expenses totaling more than 90% of its overall budget, with more than 89% of new funds used to raise more donations. Charities like Kids Wish Network, Children’s Wish Foundation International, and Cancer Fund of America are known for spending tiny portions of their resources on providing direct aid to their beneficiaries.
Bad charities also rely on duplicitous tactics to trick people. The Make-a-Wish Foundation, for example, is a well-known, respected charity with a proven track record of helping “Wish kids.” The “Kids Wish Network” knows it, taking advantage of a reputable brand for its own ends. While Make-a-Wish spends most of its donations on children, Kids Wish Network supports children with 3 cents of every dollar it collects. Kids Wish Network makes its website and solicitation materials look and sound like Make-a-Wish branding. And it confuses many givers who don’t know the difference.
Bad charities are big business in the United States. America’s worst charities rake in hundreds of millions of dollars per year. They are parasitic infections in the U.S. philanthropic system.
Veteran charities are perhaps the most infamous culprits. In 2016, The New York Times exposed the Wounded Warrior Project for enriching itself with individual donations, many from people over 65. The charity’s executives earned a reputation for spending millions of dollars annually on luxury travel, swanky dinners and $500-a-night hotel rooms. While that group has improved, it is still heavy on overhead.
The Disabled Veterans National Foundation promotes imagery of soldier suicide and wartime injuries while suggesting it is the answer to helping these compromised veterans and their families. Yet the charity spent 93% of a nearly $30 million budget in 2020 to cover overhead. It kept raising donations by showing the good work done with the remaining 7%.
And there is the collateral damage from the unnecessary fundraising videos of heroes with lost limbs or brain injuries. It is difficult to know how often those images result in our current military recruiting difficulties, but it’s safe to assume they do some damage. What is known is that the military services don’t promote the message “Join up, and we may wreck your life.” Most fundraising programs don’t rely on highly emotional cues. They have track records of success to encourage giving without highlighting injuries.
How can we improve our giving culture? To paraphrase the cartoon character Pogo, we are the enemy when we support and then encourage bad charities. Too many people become engaged by clever commercials or slick mailers. While some state attorneys general monitor contract fundraising operatives, there is no government agency that holds bad charities accountable for poor service, program inefficiency or dishonest marketing.
Improvement is mostly reliant on individual responsibility. Donors need to do their homework, distinguishing good actors from bad ones — and give accordingly. That’s why I helped start the RAM Veterans Foundation — named after World War II soldier Robert Alexander Mercer. RAM’s free research website, CharitiesForVets.org, lists those charities that succeed in efficiently using their resources. Every year, over $1 billion goes to vet charities that fail to make RAM’s recommended list. Big salaries, high overhead costs and huge “rainy day” investment funds are inexcusable.
But for injured and impoverished vets and their families, it’s raining every day. With education and awareness, however, we can help the sun shine on their lives.
• Rick Berman is president of RBB Strategies.
