Thursday, October 25, 2012

Nonprofit Fraud: Are Breast Cancer Charities Worthy of Your Support?

By Gary Snyder

It’s National Breast Cancer Awareness Month. Shall we happy or sad?

If you cannot trust the National Football League and breast cancer charities whom can you trust? Not plenty of breast cancer charities. A recent probe into the NFL Breast Cancer Awareness fundraising showed that only 5% of each sale goes to the American Cancer Society and less to cancer research. 

Numerous other breast cancer charities have abused their trusted names for the good of a few.

Cancer Fund of America is a controversial group. Both the Better Business Bureau and the nonprofit rating agency Charity Navigator have vilified it for giving less than a penny of every dollar raised to cancer patients. Charity Navigator once listed the Cancer Fund of America Support Services, as one of "10 Non-Profits That Make Ebenezer Proud." In a Georgia Governor's Office of Consumer Affairs document Cancer Fund was accused of making false and misleading claims in its mail solicitations, allegations that the Cancer Fund of America ultimately settled for $50,000

Breast Cancer Society (BCS) claims it raised $50 million in contributions in tax filings but when pressed by Marie Claire magazine the founder said that it raised just $15 million in cash donations in 2009. The other $35 million represented his estimate of medications that the BCS accepted as gifts or bought at a major discount but then listed on its books as having much higher values. He says he gets the meds from other organizations, including the Ontario-based Universal Aide Society, which saw its Canadian charitable status revoked two years ago for malfeasance. In 2009, the leader collected a $223,276 salary.

The United Cancer Council hired a fundraiser netting only $2 million out of the $28 million collected. 

The Making Memories Breast Cancer Foundation raised $1,159,654. Just under 12 percent, less than $137,000, went toward granting wishes for terminally ill breast cancer patients.

The American Cancer Society actually lost money on a program (in 2010), because the telemarketing firm got to keep 100 percent of the $5.3 million in funds it raised, plus $113,006 in fees from the society, government filings showed. No apologies from the agency.

They had more than 20,000 people who helped raise more than $2 million by participating in the national breast cancer organization’s, Y-Me, race and walk. Weeks later the Chicago-based nonprofit, which operated a nationwide hot line offering counseling to breast cancer patients, fired its staff, shut down its website address  and closed its doors. A Y-Me volunteer and founder of the group’s signature fund-raising race, said “incompetence and mismanagement,” especially under previous leadership, led to Y-Me’s downfall. The attorney general is investigating.

The National Breast Cancer Foundation was a family affair. With collections of about $10 million, the founder takes home $200,000, her son $180,000, her husband and another son all share in the largess at the expense of those in need. It even endorses misleading jewelry. About 40% of its revenues were not spent toward its mission.

The Coalition Against Breast Cancer offers virtually nothing to patients after taking in millions. The Coalition is under investigation by New York Attorney General Eric Schneiderman. He called the charity a sham.

Charity Navigator ranks The Breast Cancer Relief Foundation and the John Wayne Cancer Institute with just one star, poorly performing organizations. United Breast Cancer Foundation, Walker Cancer Research Institute and the American Breast Cancer Foundation have zero (0) stars.

This still does not include some of the questionable practices at the flagship breast cancer charity, Susan G. Komen.

It has been estimated that tens of millions of dollars are taken from those to which it was intended. Fewer than 50% of the Charity Navigator breast cancer charities have rated high for their commitment to Accountability and Transparency.

Evidence clearly indicates that both large and small cancer charity organizations are performing poorly. These few examples do not exude confidence.  Unless there is an outside intervention, a fall from grace may be imminent.

Watch out before donating. Make sure that you are confident that the charity that you donate to is honest. Exercise due diligence:
  • ·      ensure the charity is effectively governed; is it transparent, accountable and fiscally responsible?
  • ·      go to GuideStar, if available; and review the charity’s IRS 990 form; look at other watchdog websites such as Charity Navigator.
  • ·      go to the charity’s website and scrutinize the annual report and try to see if there are conflicts of interest (such as family members on the board);
  • ·      check the financial statements both at GuideStar and at website;
  • ·      examine to see if programs are in sync with organization’s mission;
  • ·      ask if the agency has internal financial controls in place to avoid fraud and misapplication of funds.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics,, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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