When most people think about non-profit organizations and charities, they think of all the good the organization does for the world and its people, but there are some charity skeptics out there who tend to think of a dark side of this industry: corrupt charities.
Don’t get me wrong, charity organizations do amazing work day in and day out for people all over the world, but there are a select few in the mix that have used the ‘do good’ image as a mask for some pretty seedy business dealings. Here is our take on corrupt charities and what went wrong.
Before I dive into the dark underbelly of charitable donations, I want to take a moment to say that this article is simply here to remind you to be aware of the ‘not-so-good’ that is out there and take some time to research who you give your money to. No bashing, just unveiling.
Some organizations mentioned in this article have cleaned up their act since this information came to light and some have since dissolved and disappeared forever (thank goodness). So take this next bit of information as a learning tool, to help you make more thoughtful decisions on who you donate to.
American Red Cross
Okay, let’s talk about the American Red Cross for a minute. HUGE organization, right? I mean, who hasn’t heard of the Red Cross?! If you’ve ever donated blood, 10/10 times it’s the amazing people who work for the Red Cross who take your blood and give you juice and crackers so you don’t pass out. And they’re also the people who rush in during times of disaster to help those who have lost everything. They raise hundreds of millions of dollars for disaster relief funds and tell people that ALL of that money will be going to said relief efforts. But – yes, there is a but – they don’t always do what they say.
One such case happened back in 2010 when the Red Cross unfortunately misused $500 million US dollars (!!!) which were supposed to be used to help rebuild Haiti. When the earthquake ravaged the island and the Red Cross ran to their aid, the people were relieved, but that was short-lived. The people of Haiti witnessed very little progress in rebuilding their infrastructure. So where did all that money go? Bureaucracy seems to be the biggest culprit here and the simple mismanagement of money. And of course administration costs also took a good chunk of the cash.
Check out the excellent reporting done by ProPublica and NPR in their piece, “How the Red Cross Raised Half a Billion Dollars for Haiti and Built Six Homes“.
But that’s not always the case
This is just one little (big) slip up where they had too much money coming in and no clear plan on how to put it to use (so they say). You’re probably thinking, ‘oh gosh I never want to donate to them again!’ but you shouldn’t think like that. They help millions of people on a daily basis; this just happens to be one such instance where they didn’t do what they said they would do…with the money. But their intentions were there.
Meanwhile, there are other charities out there claiming to be something they aren’t, whilst also taking in people’s money.
There are many charities that blanket themselves with the word ‘Cancer’ (I feel so icky even writing that). Everyone has been affected by cancer so most everyone has or will donate to such foundations or charities. We all want to find a cure, I mean who doesn’t. This may come as a bit of a shock but there are some big players in the Cancer-sector, if you will, that don’t put your money towards finding a cure or helping people going through treatments like they say they do. A large (very large) portion of that money goes directly to the people who run those organizations and foundations. Like, into their personal bank accounts. Yeah, I said that. Want to know who and which ones? I’ll tell ya.
To name a few, the Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Fund and the Breast Cancer Society were all names associated with a lawsuit filed back in 2012.
In its complaint, the F.T.C. called all four of the cancer groups “sham charities,” charging the organizations with deceiving donors and misusing millions of dollars in donations, including putting money toward personal expenses like car washes and college tuition, from 2008 to 2012. – NY Times
Proceed with Caution- 50 Giants
There is also this lovey list provided by the Tampa Bay Times and The Center for Investigative Reporting which was based on federal tax filings from the last 10 years. Be warned, it’s a doozy and there are a few on this list that we all know and have probably donated to in the past.
- Kids Wish Network
- Cancer Fund of America
- Children’s Wish Foundation International
- American Breast Cancer Foundation
- Firefighters Charitable Foundation
- Breast Cancer Relief Foundation
- International Union of Police Associations, AFL-CIO
- National Veterans Service Fund
- American Association of State Troopers
- Children’s Cancer Fund of America
This article from Smart Asset tells us that these 50 charities account for more than $1.35 billion in donations, and of that, $97 million went directly to the people who collected the money. Yeah, you read that right. That money did NOT go to the victims whom the money was being collected for, but instead to the men and women who asked you to donate!
Let me put this into perspective for you, the well known Make a Wish Foundation spends the vast majority of its donations on children (YAY!) where as the ‘Kids Wish Network’ (#1 on the list) spends only 3 cents of every dollar collected on the kids. Three cents!! That’s INSANE!
The percentages spent by these “charities” on direct aid to victims range from 0% to a high of only 11.10%. Most of the organizations spent between 0.10% and 8.6% of what they collected in direct cash aid. This is a far cry from what well-meaning contributors intended for their contributions. – Smart Asset
A bit hard to believe that people could actually do this, but it happens. Before you make any contribution to any organization, do your research. Make sure you know who they are, who they are helping, and where your donation is going. If you happen to be on the phone with an organization, ask them questions about proof of impact. If they are legit, they will take all the time in the world to answer you. If they are unwilling to answer, this is a sure-tell that the person on the other line is just a scammer.
We are on a mission to bring transparency to giving and show people exactly where their generous dollars go. Stay tuned for the Impact Sauce Ratings portion of our website, a place where we do in-depth reviews of social-good organizations AND we let YOU chime in on their credibility and impactfulness.
We aim to show you exactly who that money is helping and how each organization uses it, in its entirety. Our goal of this article was not to “bash” any particular charity, but rather, to make you aware that your dollars matter and you should feel confident in the organizations you support with them.