DICK BAYNTON: Charity As Industry

Dick Baynton

Recently I received more than 20 solicitations for charitable donations in a single week. On several days, there were multiple requests from the same charity. Many causes receive funds from my checking account creating a sizeable hole in the budget. Although some research was justified, today’s column was ‘triggered’ by a tip from a reader named Warren.

According to the NCCS (National Center for Charitable Statistics) 1.5 million charitable organizations exist in the U.S. Included in the list of causes are public charities, private foundations, chambers of commerce and civic leagues. Obviously we can’t all give to all charities but we select those that fit our budget and profile of worthwhile organizations that distribute to deserving causes. The money received by these charitable organizations amounts to about $390 billion annually; an amount greater than the annual sales of Exxon Mobil and General Motors combined.

Following are 13 charities that had the most receipts for 2016 as listed by Forbes Magazine: United Way Worldwide, $3.708 Billion; Task Force for Global Health, $3.154B; Feeding America, $2.15B; Salvation Army, $1.904B; YMCA of the USA, $1.202B; St. Jude Children’s Research Hospital, $1.181B; Food for the Poor, $1,156B; Boys & Girls Clubs of America, $923M; Catholic Charities USA, $921M; Goodwill Industries International, $902M; Habitat for Humanity International, $829M; World Vision, $825M and American Cancer Society, $810M.

Other charities in the top 100 as listed by Forbes are American Heart Association (#20) $634M; American Red Cross (#21) $624M; Unicef (#26) $509M; Wounded Warrior Project (#27) $473M; Planned Parenthood (#34) $354M; Bill, Hillary & Chelsea Clinton Foundation (#36) $331M; and Boy Scouts of America (#40) $296M. As we can imagine, some of the 1.5 million charities are more efficient than others; some probably border on fraud serving a purpose that is less than charitable.

Between 2008 and 2012, James T. Reynolds, Sr. of Knoxville, TN, his ex-wife Rose Perkins and his son, Jr., using telemarketing techniques raised an estimated $187 million for the Cancer Fund of America and three other cancer-related sham organizations. Government audits indicate that less than 5% of donations reached cancer patients. Reynolds, Sr. remains under investigation; government claims of $30M against Rose Perkins have been dropped due to her inability to pay. Son, Jr. was charged with a penalty of $65M that will be dropped when he pays $75,000 and a fourth defendant, Kyle Effler will be off the hook when he pays $60,000 of the $41M penalty he owes.  Why not prison sentences?

The reason it took several years to catch up with this fraudulent scheme is that there has been an ‘explosion’ of new charities. In year 2000, there were about 643,000 recognized charities in the U.S. In 2014, 94,000 new charitable organizations popped up and there are now well over 1 million charities in the U.S. as mentioned in the second paragraph above. In 2013, health charities raked in $31.86 billion in donations.

Research on the Bill, Hillary & Chelsea Clinton Foundation suggests that this fund, while superficially a valid organization is really an organization set up to employ friends and neighbors and provide compensation and travel. Here are some statistics: IRS Form 990 submitted in behalf of the ‘Clinton Family Foundation’ shows that in 2013, the fund had 402 employees, 400 volunteers, had an income of $147,842,769, expenses of $84,684,494 and salaries of $29,914,108. Meanwhile it distributed grants of only $8,865,052, This means that the average worker was paid more than $74,000 annually. It also shows that slightly less than 6% of incoming contributions were paid to worthy recipients; the rest went for salaries, travel, rent and other expenses.

The data for 2014 and 2015 are even worse as related to the Clinton Family Foundation. In 2014 with 486 employees, individual salaries were almost $80,000 and contributions to their recipients were less than 3%. In 2015 with an expanded workforce of 528 employees, individuals were paid about $72,000 and contributions to their ‘worthy causes’ increased to about 3%.

About $7,000 per year or $28 a day per employee is distributed by the Clinton Family Foundation. Millions of dollars spent on travel sounds like jaunts and junkets. How many ‘charitable organizations’ cross the line between altruism and illegitimacy? Does the Clinton Foundation deserve an investigation?

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