OPINION:
I’ve spent a career chastising activists who twist statistics, put out junk science and cherry-pick economic data. In their world, the end justifies the means — intellectual honesty, integrity and context be damned. A prime example is the Humane Society of the United States. While the group benefits financially from the public believing donations will directly help cats and dogs, only about 1% of the money raised goes to fund pet shelters. Unfortunately, the problem of deceived donors goes beyond the petty theft found in some animal-centric groups.
Americans are also being hoodwinked by military veteran charities. Despite the calls around Memorial Day to recognize and help those who have served our country, the spectrum — from outright fraudulent nonprofits to ones whose finances are extremely poorly managed — is endemic.
For example, in 2016, a group called the Healing Heroes Network collected $2.7 million from donors to supposedly administer medical treatment to veterans. About $13,000 went directly to those veteran services. An 11-state investigation found the organization directed most donations away from rehabilitation programs towards bloated salaries, telemarketing junk mail and T-shirts.
The Disabled Veterans National Foundation impressively raised more than $115 million during its first six years of operation. But skilled fundraising doesn’t necessarily translate to smart administration. Of that money, $104 million was used to pay vendors, rather than helping former service members. “Support” that veterans did receive was often unnecessary, if not useless, including the distribution of 11,000 bags of M&M’s.
Short of criminal mismanagement of donations, other veteran-related nonprofits don’t live up to the high standards that Americans expect. Hoping no one will notice, too much money is spent on overhead and administration. Fundraising campaigns are ineffective — enriching vendors rather than meaningfully supporting veterans. And too much cash is hoarded in reserves. Some groups are sitting on five to 15 years’ worth of donations in hedge funds rather than delivering on advertised programs.
While there are several existing charity evaluation platforms, it’s clear the current level of philanthropic education isn’t working. In fiscal years 2019 and 2020, donors gave nearly a billion dollars ($966 million) to groups that don’t effectively or efficiently aid service members and their families. Roughly one third ($353 million) went toward organizations that were an effective steward of donor resources. Houston, we still have a problem.
To right this wrong, there is a new and unique veteran-specific nonprofit: the RAM Veterans Foundation. RAM has developed an informative website that works as a consumer reports for vet charities. Through aggressive ads aimed at educating donors, the mission is to divert much of the hundreds of millions of dollars in donations from poorly rated charities to those worthy of support. All the information will soon be well known and is already available to the public. Two RAM billboards are already in place in the Times Square area.
The RAM rating system differs from existing platforms. Rather than a sliding scale that reflects an average grade, RAM uses an uncompromising pass/fail standard covering four important financial factors. It is a high bar, but 30 veteran charities pass the test. The details are all at the website, www.charitiesforvets.org.
RAM will have achieved success when the ratio of financial resources going toward effective charities and those not recommended is flipped on its head. Poorly rated organizations can either improve their financial management or donors can reallocate their support. Either one is an acceptable outcome.
Veteran charities that waste money are taking advantage of more than donors. American generosity is being trashed at the expense of service members and their families. Sunlight is the best disinfectant to root out this malfeasance.
• Richard Berman is president of Berman and Company in Washington and is a board member of the RAM Veterans Foundation.
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