Wednesday, December 28, 2011

How dubious "charities" break your heart to rip you off

He, and thousands like him, are used as bait by "charities."
Ben Affleck pleads for your money to "help our nation's heroes."

    (12/28/14) The music swells and harrowing pictures flow by as TV ads for blown-apart, disfigured, brain-injured war veterans, and trembling, abused, beaten and starved animals flood the airwaves. These are carefully calibrated to move you to tears, and into action. "Just $19 a month," they beg you, or "just 35 cents a day," to alleviate unspeakable suffering. Given how often these ads run, they must have millions of people rushing right to their phones to donate on the spot. It's hard not to -- unless you do your homework. Even knowing as I do that they are exploitative, I can't ignore them. They are profoundly, albeit cynically, poignant. It's almost impossible not to be moved by them, even if you're well-informed.
    The Wounded Warriors Project has mounted a major  campaign on TV in recent weeks to speed up the influx of your hard-earned money. The executive director of this "nonprofit" pays himself more than $600,000 a year, according to its Form 990 tax return, and his deputy about $400,000 a year. Nine other executives haul in between $150,000 and $200,000 a year, plus benefits, pensions and expense accounts. Ben Affleck appears in a new ad for Paralyzed Veterans of America, which spends twice as much money to raise funds (60 percent of its income) as it spends on helping its "heroes."
    Is that where you want your money to go? Especially since billions of your tax dollars are already being devoted to veterans?

He and thousands like him cry out for your generosity.
   The ASPCA has perhaps the most grueling ads to watch,  showing abused, helpless, trembling  animals with the saddest, most plaintive eyes you've ever seen. They tear you apart. But where do your contributions go? For one thing, the CEO pays herself more than $600,000 a year, just as the Wounded Warriors honcho does.

    The two top people at Susan Komen for the Cure (breast cancer) pay themselves $561,000 and $607,000, so when you "race for the cure," you're racing for them. Not to be outdone, the CEO of the American Cancer Society must live very nicely on $790,000 a year, funds that were donated for research.
    But that's nothing compared to the CEO of the Chicago-based "nonprofit" Alzheimer's Association,  who hauls in more than $2.7 million annually, according to IRS Form 990 for fiscal year 2013, and there are 70 local chapters which also have generous pay packages. In the past 32 years, the Alzheimer's Association has contributed only $335 million to research -- less than 18 months worth of its revenue over that time period
    The CEO of Save the Children is actually saving herself. Without your financial help, she might be languishing among the middle class, instead of paying herself $425,000 a year. Ditto for two of my (formerly) favorite causes, the ACLU, which pays over $400,000, the NAACP, which pays $300,000. And Amnesty International pays its executive director well over a quarter million dollars annually, as does the Lupus Foundation. Doctors Without Borders and the Epilepsy Foundation are somewhere in between, paying their top people about $150,000. Even the small Road Home, a small Salt Lake charity to aid the homeless, pays its director $100,000, triple the median income of those who are being asked to give money. Greenpeace, the Sierra Club and the NAACP Legal Defense Fund (totally separate from the NAACP) are noteworthy exceptions to all this self-indulgence.

They'll "Save the Children," after you pay the CEO $425,000.
    I have reported previously on the outrageous salaries, expense accounts and benefits that are paid to top staffers at some of America's most trusted charities. NPR is another annoying beggar, which implores you to give "all you can," so they can pay salaries in the $250,000 to $1.2 million range, supported by their listeners, few of whom make anywhere near that much money. Their chronic, melodramatic  pleas "to pay for the programs you love"  are actually pleas for you to support their "Top One Percent" lifestyles.
    Among all these charities, close to a third of what you contribute goes, on average, to finance ever-more fundraising. These charities are asking those of us who make middle-class salaries to bankroll their high falutin' lives. It pisses me off.
He and thousands like him cry out for your generosity.
    Also on TV sets everywhere,  St. Jude is blanketing the airwaves with tender pictures of adorable children with cancer. My story, "Hey Jude: You made it bad" (, documents the extravagant compensation and lavish facilities paid for by you, and illustrates the ways in which both patient care and research have been compromised. The CEO of the hospital, William Evans, is paid almost a million dollars a year, and has a benefits package that is akin to those on Wall Street.
How can anyone divert funds from her life-and-death battle?
    Richard Shadyak, CEO of ALSAC, Inc. (American Lebanese Syrian Associated Charities), which was founded in 1957 and "exists for the sole purpose of raising funds to support the operating and maintenance of St. Jude Children's Research Hospital," takes $650,000 a year for himself. (It is not clear what byzantine financial machinations went into St. Jude's decision to incorporate a separate fund-raising apparatus, unlike other "nonprofit" hospitals.)
     A few other examples of compensation at this "children's charity" provide a sense of how the funds are spent. Every dollar that is paid out to some fat-cat is implicitly taken away from research and patient care:

EVP James Downing  $800,000
EVP Joseph Laver $668,000
Larry Run, faculty $700,000
Thomas Merchant, faculty $700,000
    Goodwill Industries, which I've also covered (,  is yet another "charity" whose main beneficiaries are its executives and store managers.    In 2012, Goodwill Industries International, Inc., the national parent corporation for all of the nation's secondhand clothing franchises, paid its president and CEO James Gibbons $729,000.  Dozens of state and local chapters copied the national headquarters' executive extravagance. IRS form 990s indicate their salaries were hundreds of thousands of dollars each (17 of them exceeded a million dollars), essentially for being store managers. It is they, not the umbrella organization headquarters, who determine their pay. Disabled or disadvantaged store employees earn as little as 22 cents an hour, and as much as minimum wage.
    That's where the profit from your donations goes. The government pays the disabled employees, costing taxpayers about $90 million a year.This is yet another "beloved" charity, such as the Red Cross and United Way, that has shown itself to be fundamentally corrupt and contemptuous of its good-hearted donors. 
    The American Red Cross, which has been plagued by one scandal after another, pays its CEO almost $600,000, not to mention her many "high-maintenance" colleagues. This is a "nonprofit"? What does that mean? It seems pretty damned profitable to me.
    Charities that take advantage of our concern for war veterans are popping up all over the place, to corral our guilt and our compassion. They show men and women who have been grossly disabled, disfigured or psychologically devastated while "fighting for our freedom." Most of them are scams dreamed up by "entrepreneurs" who see a goldmine in the sympathy they can generate -- violin music and all -- by depicting these brave, modest, determined people. They then keep the money for themselves, and provide minimal services, as has been documented by major national media.
Lives blown to hell for your benefit (?) How can you turn away?
    The CEO of Save the Children is actually saving herself from a middle-class lifestyle by paying herself $418,000 a year. Even the small Road Home, a Salt Lake charity for the aid of the homeless, pays its director $100,000, triple the median income of those who are being asked to give money.
    When I asked an executive of the Charity Navigator site why executive compensation isn't considered when the charities are rated, she replied that it's "subjective." It isn't subjective to me, any more than the amount they spend on fundraising and travel is.
    Until there is substantial reform in the way charities are defined and regulated, I will confine my charitable donations to individuals who need a "hand up": disadvantaged college students, refugees, the homeless and the hard-core unemployed. I am explicit about how the money is to be spent (not on manicures and cable TV), and I can withdraw my support if it is abused. This takes more effort than sending a check to Wounded Warriors, but it's definitely worth it.