Monday, March 9, 2009

Look Before You Leap

Your Hard-Earned Money

Buddy can you spare a dime: There is no question that we are living in troubled financial times. Everybody is hurting including charities. Everybody is looking for ways to enhance their dwindling income stream so it is not unusual to see a plethora of advertisements in both snail mail and your inbox as well as requests for donations to charities that you may or may not have heard of. The question becomes not only, “Do I still have discretionary income to share?” but also, “Where is my hard earned money going and how well will it be used?” My good friend and regular kibitzer Myron forwarded me a copy of a list of charities and their ratings. In the interest of community service I offer the information to my blog readers with a thank you to Myron.

Read and Learn: The American Institute of Philanthropy, a leading charity watchdog, issued a report card for 29 veterans and military charities. Letter grades were based largely on the charities' fundraising costs and the percentage of money raised that was spent on charitable activities. The charities that received failing grades are preceded by an asterisk (*).

Air Force Aid Society (A+)

*American Ex-Prisoners of War Service Foundation (F)

*American Veterans Coalition (F)

*American Veterans Relief Foundation (F)

*AMVETS National Service Foundation (F)

Armed Services YMCA of the USA (A-)

Army Emergency Relief (A+)

Blinded Veterans Association (D)

Disabled American Veterans (D)

*Disabled Veterans Association (F)

Fisher House Foundation (A+)

*Freedom Alliance (F)

*Help Hospitalized Veterans/Coalition to Salute America's Heroes (F)

Intrepid Fallen Heroes Fund (A+)

*Military Order of the Purple Heart Service Foundation (F)

National Military Family Association (A)

*National Veterans Services Fund (F)

National Vietnam Veterans Committee (D)

Navy-Marine Corps Relief Society (A+)

*NCOA National Defense Foundation (F)

*Paralyzed Veterans of America (F)

Soldiers' Angels (D)

United Spinal Association' s Wounded Warrior Project (D)

USO (United Service Organization) (C+)

Veterans of Foreign Wars and Foundation (C-)

Veterans of the Vietnam War & the Veterans Coalition (D)

Vietnam Veterans Memorial Fund (D)

*VietNow National Headquarters (F)

World War II Veterans Committee (D)

Additional information is available at:

Congressional Hearings on the matter: In a statement before congress, Daniel Borochoff, President, American Institute of Philanthropy, Chicago, Illinois testified before the House Committee on Oversight and Government Reform Hearing on Veterans Charities. His remarks can be found at the following web site along with the ratings:

Among other things, the rating chart shows fund raising costs per $100 raised for each charity.

Americans gave millions of dollars in the past year to veterans charities designed to help troops wounded in Iraq and Afghanistan, but several of the groups spent relatively little money on the wounded, according to a leading watchdog organization and federal tax filings.

Eight veterans charities, including some of the nation's largest, gave less than a third of the money raised to the causes they champion, far below the recommended standard, the American Institute of Philanthropy says in a report. One group passed along 1 cent for every dollar raised, the report says. Another paid its founder and his wife a combined $540,000 in compensation and benefits last year, a Washington Post analysis of tax filings showed.

Richard H. Esau Jr., executive director of the Military Order of the Purple Heart Service Foundation, based in Annandale , said the cost of fundraising limits how much his group can spend on charitable causes. 'Do you have any idea how much money it costs to advertise? It's unbelievable the amount of money it takes to advertise in the print and electronic media,' he said. 'I'm very proud of what we do, and we certainly do look after everybody. The point is we do the right thing by veterans.'

Borochoff said many veterans charities are 'woefully inefficient, ' spending large sums on costly direct-mail advertising. 'They over-solicit. They love to send out a lot of trinkets and stickers and greeting cards and flags and things that waste a lot of money that they get little return on,' said Borochoff, who plans to testify before Congress today.

The philanthropy institute gave F's to 12 of the 29 military charities
reviewed and D's to eight. Five were awarded A-pluses, including the Fisher House Foundation in Rockville, which the institute says directs more than 90 percent of its income to charitable causes.

One group received an A, and one received an A-minus.

Jim Weiskopf, spokesman for Fisher House, said the charity does not use direct-mail advertising. 'As soon as you do direct mail, your fundraising expenses go up astronomically, ' he said.

One egregious example, Borochoff said, is Help Hospitalized Veterans, which was founded in 1971 by Roger Chapin, a veteran of the Army Finance Corps and a San Diego real estate developer. The charity, which provides therapeutic arts and crafts kits to hospitalized veterans, reported income of $71.3 million last year and spent about one-third of that money on charitable work, the philanthropy institute said.

In its tax filings, Help Hospitalized Veterans reported paying more than $4 million to direct-mail fundraising consultants. The group also has run television advertisements featuring several celebrities.

Our military service people are considered the most hallowed of nearly any profession in America. Many are called, some volunteer, but they all serve their country, often placed in harm’s way. The numbers who sacrifice their lives is tragic, but the numbers who return home in need of medical services and rehabilitation is staggering. Many of the organizations listed above began with good intentions but too often as small groups become successful they turn into bureaucracies, often becoming unwieldy and top heavy with administrative costs. The reprint of the above information is an effort to encourage continued giving to worthy charities, but also to do your due diligence before giving away money to organizations that would use it for purposes other than those you intended.

A little blogging music Maestro... “Battle Hymn of the Republic” played by John Phillip Sousa.

Dr. Forgot

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