Fake Charities Update: The Unethical Conduct That Makes All Of Us Worse

scamsIt’s one of the world’s oldest scams, one of the most lucrative and perhaps the most damaging: people preying on the best instincts of human beings to take their money for personal gain. The internet has made it easier to do than ever, and the  con is flourishing. I don’t often write about the incidents when they arise, in part because there’s nothing to argue about: everybody agrees that it’s not just unethical conduct, but bordering on evil. Fake charities are worse than scams, however, because they actively make people less kind, generous and caring for their own protection. Every fake charity exposed makes it harder for real charities to help people who genuinely need it. Like a friend of mine who never helped a homeless person again after seeing a beggar whom he had just given 20 bucks on a New York City street briefly get out of his battered wheel chair and nimbly run over to get a cigarette from a compatriot, those who stop trusting pleas for help seldom start trusting again. The fakes make us less kind and generous, and that makes society worse for everyone.

Fake charities large and small have been much in the news lately, so a little catch-up is warranted.

Recent  beauty queen Brandi Lee Weaver-Gates of Bellefonte, Pennsylvania, told friends she was battling chronic lymphocytic leukemia and accepted funds from events that raised money to help her pay for medical bills. It was a lie. The 23-year-old was arrested this week and charged with theft by deception and receiving stolen property. Brandi had been crowned Miss Pennsylvania International, so her device of shaving her head to look like she was undergoing cancer treatment was especially effective. The most recent fundraising event held for her was called  Bingo for Brandi and raised upwards of $14,000.

So far, she has been told that she has to give her crown and sash back.

Brandi is small potatoes, though, compared to Zvi Shor, who started the National Children’s Leukemia Foundation in 1991 after losing a son to leukemia. His organization’s brochures and telemarketing pitches raised millions for the charity’s bone marrow registry, its cancer research building,  and its Make a Dream Come True program for children with cancer, which  arranged family trips to Disney theme parks and introduced dying children to their  favorite celebrities.

None of these existed as they were described, the New York State attorney general’s office said in a petition filed in State Supreme Court last month.  The state charges that more than 80% of the $9.7 million that the charity collected from mid-2009 to mid-2013 was used for fundraising. It paid out only $57,451 in direct cash assistance to leukemia patients, and almost nothing in its “Make-A-Wish” rip-off. Investigators found that the charity was really a one-man operation out of  the basement of a home in Brooklyn. That one man was, of course, Shor, who ran a construction and plumbing business. Using the money from his “foundation,” he  paid himself $595,000 in salary and $600,000 in deferred compensation from 2009 to 2013, and set up a lifetime pension that would pay him more than $100,000 a year. There was no board, no audits.

His lawyer told the New York Times that Shor set up the foundation with “the best of intentions.”

Oh. Well that’s all right, then.

This was just the latest in a series of large scale fake cancer charity scams that law enforcement has moved to prosecute .In May, the Federal Trade Commission and 58 law enforcement partners from every state and the District of Columbia charged four sham cancer charities and their operators— Cancer Fund of America, Inc. (CFA), Cancer Support Services Inc. (CSS), their president, James Reynolds, Sr., and their chief financial officer and CSS’s former president, Kyle Effler; Children’s Cancer Fund of America Inc. (CCFOA) and its president and executive director, Rose Perkins; and The Breast Cancer Society Inc. (BCS) and its executive director and former president, James Reynolds II. with fraudulently raising more than $187 million from generous Americans and spending almost all of it on the scam’s creators and accomplices,  their families and friends, and of course, the fundraisers. It is estimated that only about $5 million of that $187 million actually went to anything related to cancer research or cancer patients.

South Carolina Secretary of State Mark Hammond said, in connection with the announcement of the charges, “When charities lie to donors, it is our duty to step in to protect them. At the same time, however, this historic action should remind everyone to be vigilant when giving to charity. This case is an unfortunate example of why I always tell my constituents to give from the heart, but give smart.” That sounds good, but according to the complaint, the fake charities used materials distributed by the Combined Federal Campaign, which raises money from federal employees for non-profit organizations. When people give to the Combined Federal Campaign or the United Way, they reasonably assume that these organizations have done their due diligence and aren’t passing on donations to scamsters. That is apparently not always a justifiable assumption.

The good news is, I suppose, that many of these frauds and schemes have been discovered, stopped and punished. The bad news that smothers the good is that before this occurs, many generous people give money that could be used to do good things for those in need, but instead is used to assist shameless sociopaths in their lifetime quest to live off of those who do give from the heart, until, jaded by experience, they become as wary, suspicious, selfish—you know: smart—as everyone else.

 

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Facts: FTC, New York Times, ABC, 

12 thoughts on “Fake Charities Update: The Unethical Conduct That Makes All Of Us Worse

  1. And then there’s the Bill and Hillary and Chelsea Clinton Foundation. How do its overhead and salaries numbers versus their pay outs stack up to these outfits, Jack? I’m sure you know as you are an expert on foundation abuse.

  2. This is why I have checked out charities which I give to with Charity Navigator or other websites that rank charities according to how much money that goes to direct services for beneficiaries vs. how much goes to executive salaries and “administrative expenses”. I also believe that there is a special place in hell for the lowlife that scam guilable people for the bottom feeders personal gains.

  3. All of this is terrible, but I remind you of the much-touted Red Cross, which about 15 years ago was embroiled in scandal when it was found that 80 cents of every dollar contributed went to “OVERHEAD.”

    As a former fund raiser for a major university and then for a consulting firm, the ethics of fund raising are very clear to me. At the university I focused on program funding from foundations and corporations, which had strict reporting requirements; but frankly, I have no idea what that institution did with alumni contributions. For the consulting firm, our mantra was “vet, vet, vet” before we took on a client institution (schools and other well-known non-profits, e.g). We would have discovered the scam with the Leukemia Society of America on our own. Whether we would have reported it or not is a question,because we never were approached by a scam non-profit.

    You’re right: the more scams are discovered the less people give. It is interesting to note that, at least a few years ago, 90% of all charitable giving was individuals giving to their churches… no comment there on how that money is spent.

    I may be overstepping and being unfair here, but in conversation with a veteran I was warned against “The Wounded Warriors Project” because of its high overhead. “Look closely before you give, he said. “They have great ads, but you’d do better giving money and clothing and household items to Amvets. Just my opinion.” I give to Amvets (and several animal rescue organizations, and want to support veterans. Just need to vet each program, and I advise readers to do the same. Don’t wait for the law to get to them, It takes too long.

  4. P.S. I recall my brother-in-law telling me that years ago the Red Cross CHARGED SERVICEMEN FOR COFFEE (!), and that having vetted all kinds of charities found the Salvation Army to be among the best.

    • I’ve learned about that myself, Elizabeth. I was astounded to learn just how corrupt the American Red Cross had become. That’s a group that most people would give to automatically, based on a reputation that, unfortunately, no longer applies. And yes, the Salvation Army is one of the very best. Overhead is the key. If a charity sends out a lot of colorful mailings, its top people get six figure salaries and more than thirty percent of its takings go to costs, that organization is to be avoided. Be wary from the onset if it’s associated with Hollywood and uses celebrities as a drawing card.

      • I would love to learn how much television advertising (such as the unbelievably ubiquitous “Wounded Warrior Project” pays for its TV fund raising. Do networks set aside free or almost fee time for non-profit
        “assistance” organizations? Or is my vet friend right: WWP has a huge overhead — maybe much of it is TV advertising… I get World Wildlife Fund, ASPCA, etc., requests for funds by e-mail mostly, though there are a lot of animal rescue ads (I turn them off, they’re so upsetting) on TV as well.

        I think the Internet should help all of us vet non-profits before we give. I will NEVER give to the Red Cross (even tho they say they’ve cleaned up their act), or to rich colleges soliciting its alumni — Harvard, e.g., has an endowment in the billions, one estimate is that it is larger than the 9th largest NATION in the world. And they “need” money from alumni? Their money managers make them so much money that they get millions a year in bonuses… non-profit my (pardon me) ass…

        • I understand that two of the best charities are those sponsored by the American Legion and VFW, whose upper management have salaries of zilch. The big colleges have way too much money and they use it for frivolous and often perverse projects under the label of “the humanities”. One thing’s certain, you should never assume that a charity is above board because of name recognition. Things change.

  5. Like all politics being local so is charity for me with a slight caveat. Everything that is local and I vet it all. Some organizations I volunteer for now or in the past. I do however give to a few selected state and national organizations that do tug at my personal preferences – Trustees for Reservations, Rails to Trail and Wildlands Trust – but I also volunteer for all three so there is a comfort zone.

    I have never taken a charitable contribution on my income taxes. I know that may appear bizarre, but I have always felt that it should have no strings attached.

    I’ll gladly contribute to the Clinton Foundation when those Mullah’s on the sidebar convert to Judaism.

  6. Well, as President Reagan once said “Trust but verify”. Checking things out on Charity Navigator, the Wounded Warrior Project spends an awful lot of money on fundraising and administative expenses. I don’t know about Amvets. Probably worth checking out.

  7. This is why I don’t do charity. If someone comes through the office selling stuff for their kids, OK, just to shut them up, otherwise nada.

  8. If scamming for big bucks is that easy, then I am tempted to set up a GoFundMe site for my retirement security. It’s such a tragedy, you know, being cooped-up in some suburb without Cayman Islands Breeze Therapy.

    • Let’s get together and start a relief fund for bald ethicists from Massachusetts who need readjusting to normal life! We’ll need an old, washed up actor as our front man. Ed Asner? Burt Reynolds? Someone dumb…

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