25 of America's Worst Charities - Plus Tips on How to Avoid Getting Scammed
In 2014, Americans donated an estimated $350 billion to charities. A generous country we are, but how much of those funds actually went to the advertised causes? You might not want to know. There are good charities and there are bad charities—and there are the worst charities.
The Tampa Bay Times' America’s Worst Charities gain their titles by how much they raise in donations and how little of that money goes to the actual causes they advertise. As these deceptive organizations ask you for your financial support, they lie about to where or whom that is allotted, sometimes paying themselves “multiple salaries” and “consulting fees.” One “cancer charity” paid the company president's son nearly $18 million over eight years, to solicit donations. The Tampa Bay Times reports:
Some nonprofits are little more than fronts for fundraising companies, which bankroll their startup costs, lock them into exclusive contracts at exorbitant rates and even drive the charities into debt.
Bogus charities often use accounting tricks that allow them to legally squeak by. Not only do they deceive the public, they are also taking money away from reputable charities that make a true difference in the lives of many in need. One huge dishonorable charity in Florida, called the Kids Wish Network, has taken the #1 spot for “America’s Worst Charity.” The Tampa Bay Times adds:
Every year, Kids Wish Network raises millions of dollars in donations in the name of dying children and their families. Every year, it spends less than 3 cents on the dollarhelping kids. Most of the rest gets diverted to enrich the charity's operators and the for-profit companies Kids Wish hires to drum up donations.
Below is a descending list (#1 being the worst) of America’s Worst Charities, last updated in December 2014. Sadly, not much has changed since the report was created in 2013. The majority of these charities continue to mislead. They are ranked first by how much each charity took from donors and paid solicitors, and then how much of the total donations raised was paid to their cause. Some of the figures are astounding.
16. National Caregiving Foundation
17. Operation Lookout National Center for Missing Youth
18. Vietnow National Headquarters
19. National Cancer Coalition
20. Operation Lookout National Center for Missing
21. YouthAmerican Foundation For Disabled Children
22. Heart Support of America
21. Police Protective Fund
23. Veterans Assistance Foundation
24. Children’s Charity Fund
25. The Veterans Fund
For a full interactive list of America’s Worst Charities, visit Tampa Bay Times.
There are thousands of charities out there, perhaps millions. Some may call you for donations and target your demographics for different reasons. Kris Hundley of Tampa Bay Times and Kendall Taggart of the Center for Investigative Reporting are the creators of America’s Worst Charities. Here are some tips they offer to the public.
Before you give:
- Ask if the caller is a paid telemarketer.
- Get the exact name and location of the charity he or she represents.
- Find out exactly where your donation will go. Don’t let them brush off your questions with generalities. They know the exact percentage; make them tell you.
- Ask for examples of the charity’s good deeds.
- Call the local nonprofit that supposedly benefited and ask if it's ever heard of the charity that’s asking for your donation.
- Cold-calling donors is one of the most expensive ways to raise money. Charities that use paid telemarketers often let the fundraisers keep 80 to 90 cents of every $1 raised.
- Most of the money you think is going to needy veterans or dying kids is paying telemarketers’ overhead and profit.
- Hang up and give directly. If you get a call and want to give, don’t hand over your credit card number or start writing a check. A few quick Internet searches can uncover charities that have been criticized for high fundraising costs or unfulfilled promises.
The IRS also offers some tips worth mentioning:
- Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations.
- Don’t give out personal financial information, such as Social Security numbers or passwords to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money. People use credit card numbers to make legitimate donations but please be very careful when you are speaking with someone who called you.
- Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
To make it easier to decipher the good from the bad, you can find some reputable websites available to the public online. They are free. If you sense something about a charity doesn’t sound right, you may want to follow those feelings and take a few minutes to research. Here are five recommended sites:
- Charity Navigator (www.charitynavigator.org): This website uses a four-star system to rate charities based on their financial performance and accountability. It also shows how the charity ranks compared to others doing similar work.
- GuideStar (www.guidestar.com): Find a charity’s latest IRS 990 filing and read personal reviews on this website. Access to recent IRS documents is free with registration.
- CharityWatch (www.charitywatch.org): This site grades about 600 large charities based on the amount spent on programs and the cost to raise money. Though some information is available for free, more in-depth information requires a $50 membership.
- Better Business Bureau Wise Giving Alliance (www.bbb.org): The Better Business Bureau rates 1,400 charities based on 20 benchmarks found in the IRS 990 and audit reports. All reports are available for free online, searchable by charity name.
- State charity offices (www.nasconet.org): The National Association of State Charity Officials lists the government agencies responsible for regulating charities and solicitors.
This article is not meant to dissuade anyone from giving generously. A compassion to help others magnifies the beauty in our human spirit. This is only meant to enable the public to make more informed decisions. These are great lists to keep handy and/or pass along. Being watchful will allow us to direct our donations to where they can do the most good.
Very special thanks to Kendall Taggart of Tampa Bay Times, Kris Hundley of Center For Investigative Reporting and Adrienne Hill of NPR. The Tampa Bay Times and the Center for Investigative Reporting will continue to shine a light on bad charities. If you think you've been contacted by a suspect charity, share your story.