That was the closing sound of my Venus flytrap model of journalism–I just sit, wait and pounce when approached–around another candidate for my new list of “America’s Stupidest Charities.” That’s a roster I just started compiling of dodgy charities that cold-call the New To Seattle world headquarters asking for money despite a previous and critical post in this space about the same charity.
Earlier this week, the inaugural entry was the American Veterans Support Foundation, a d/b/a of the National Vietnam Veterans Foundation. You can read earlier my post about the organization here. According to its own regulatory filings, nearly 90% of the cash collected from the public–$21 million of $24 million raised over six years–went for fundraising expense, mainly the fees of paid outside fundraisers.
The second candidate? (drum roll again, please): Cancer Support Services, of Dearborn, Mich.
The caller on behalf of Cancer Support was one of those annoying computer-controlled interactive voices, of the female persuasion, going by the name of “Amanda.” As is my want, I started asking questions about fundraising costs. “I’m in training right now and I don’t know it,” “Amanda” confessed. She said I could get that information from her “supervisor,” to whom she switched me.
Suddenly, I was talking with Jeannine (I’m guessing at the spelling), seemingly a real person. I continued to ask questions. Jeannine said she would transfer me to her “manager”. “Just a minute please,” Jeannine said sweetly as I was put on hold.
A few seconds later, the line went dead.
My earlier story two years ago describing Cancer Support Services can be read here. Cancer Support was–and is–a stalking horse established years earlier by another sketchy charity, Cancer Fund of America, of Knoxville, Tenn. (No. 2 on the now-celebrated Tampa Bay Times list of “America’s Worst Charities,” compiled in association with The Center for Investigative Reporting and CNN). In my view then and now, Cancer Support served as a laundry service for Cancer Fund, sending over the little cash left over after paying the outside fundraisers. That allowed Cancer Fund to count that cash in some of its filings without also including Cancer Support’s cost of raising it.
Cancer Support/Cancer Fund also took advantage of the donation of goods, or gift-in-kind, also called GIK. Such donations can be obtained at virtually no fundraising expense, and are prone to wildly exaggerated valuations that can make a charity’s financial efficiencies look a lot better.
The best way to analyze this is by looking at Cancer Support/Cancer Fund’s latest combined financial statement, for 2012, downloadable from this page, which cancels out the intra-organizational transfer obfuscation. The numbers are not materially different from my earlier look at Cancer Support.
For 2012, Cancer Fund/Cancer Support said it received (in round numbers) $14 million in cash gifts and $23 million in GIK donations, for total revenue of $37 million. It declared it spent $25 million in direct furtherance of its charitable mission, $2 million in management and certain overhead, and $11 million in fundraising. The result was a paper loss of $2 million.
As these things are normally calculated, Cancer Fund/Cancer Support’s charitable commitment ratio–the amount of total expenses in direct furtherance of the charitable mission–was 66% and its fundraising efficiency–the amount of donations remaining after subtracting fundraising costs–was 69%. Not great, but tolerable (charity watchdogs say 65% is the lowest acceptable for each calculation). However, if you ignored the GIK and just looked at the cash–overwhelmingly coming from Mom and Pop donors via those outside paid telemarketers–the situation really changed.
As I read the numbers, Cancer Fund/Cancer Support received $14 million in cash gifts and spent $14 million in cash expenses. But only $21,000 of that $14 million in cash gifts went for things I would call clearly charitable, like cash grants. That’s one-seventh of 1%. Put another way, of every $100 donated, just 15 cents reached true charity. And to raise that $21,000, the combined enterprise spent $11 million in fundraising expense–more than 500 times as much.
Yet Cancer Support is smart in soliciting me?
The organization now joins the elite club of contenders for my dumbest charity list. The New To Seattle Legal Department insists that I note two things: (1) The Cancer Fund/Cancer Support accounting is probably legal, and (2) anyone is free to comment below on this post.
Meanwhile, time again to reset the trapping leaves of love for my next encounter.