- - Monday, August 10, 2020

While we’ve been watching far more television than normal, we’ve gotten a larger dose of appeals for money. And I’m not talking about pillows or weight loss programs. I’m referring to the heartbreaking appeals from charities. In 2019, Americans donated a combined $450 billion to charitable causes. But not all charities are created equal. Some organizations pour large sums of their budget into executive salaries, circular fundraising expenses, big offices and extravagant overhead costs.

Nearly every category of charity has good and bad actors, but causes with an emotional fundraising approach attract the lion’s share. Organizations that claim to protect animals or help returning or injured soldiers are prime examples where some organizations fail to deliver on implied promises.  

The Wounded Warriors Project (WWP) is a charity that seemingly provides assistance to wounded veterans. But a deeper dive into the organization’s financials reveals a darker side. According to the latest data from CharityWatch, WWP only spends 64% of its budget to provide programmed help to veterans. And the help it offers is often more modest than you suspect. With a little bit of research you’ll find program services include “greeting [veterans] at the airport,” “spreading the word about [wounded veteran] needs” and coordinating “physical activity sessions.” Interesting, but hardly what the commercial imagery suggests your money will provide.

Much of the budget is bogged down in executive pay — which can top $300,000 — office expenses, fundraising schemes and other administrative costs. A 2016 CBS News investigation previously outed WWP — citing 40 former charity employees who described the spending as “out of control.” The report detailed how staff dined at “fancy restaurants” and stayed at “lavish hotels.” One destination staff retreat in Colorado cost the organization roughly $3 million.

While that report was seen by many, the WWP continues to advertise its value, which crowds out better groups that have less money to spend on commercials. Disabled American Veterans (DAV) is another bad apple charity. Given a D rating by CharityWatch, the group spends 51 cents of every dollar on activities to help disabled veterans.



Conversely, other veteran and military groups — including the Semper Fi Fund, Fisher House Foundation and Homes for Our Troops — receive “A”-ratings.

On the animal care side, the Humane Society of the United States (HSUS) — which polling indicates is a name that is confused with local shelters, actually does shelter money. Its last tax return shows more than $35 million is sheltered in offshore accounts. The organization spends roughly 1% of its budget in grants to local animal shelters. Historically, more has been invested in pension plans each year than caring for shelter animals. Donations would go to much better use at, for example, American Humane — which enjoys an A grade from CharityWatch (disclosure: I have supported their work).

Redirecting donations that typically fund C-, D- or F-rated charities to groups that spend budgets more wisely is a win-win. More than 50 veteran and animal groups received poor ratings from CharityWatch in 2020 — organizations that in some cases rake in hundreds of millions of dollars per year. Donations funding great jobs and perks while shortchanging the intended beneficiaries is money that needs to be redirected. (For example, the head of the American Society for Prevention of Cruelty to Animals (ASPCA) gets paid more than $800,000 annually while running one shelter.)

Imagine how much more help would be afforded those in need by redirecting all the donations to A- and B-rated groups. Cautionary note: For those who want to do their homework before giving, go to charitywatch.org. The Better Business Bureau and Charity Navigator ratings are not reliable for varying reasons. 

• Rick Berman is president of Berman and Co. in Washington, D.C., and manages the website www.Chinaownsus.com.

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