Monday, April 29, 2013

Are Donated Goods Cheating Rankings?

by Gary Snyder


World Help, a Christian relief charity that last fall ranked No. 77 on The Chronicle’s list of the country’s largest nonprofits, now says its revenues were only 7 percent of what it previously reported to the Internal Revenue Service.

The revised numbers, which appear in the group’s audited financial statements for 2012, could have implications for other nonprofits that say they received goods from the charity.

World Help grew rapidly in recent years thanks to donated medicines. The organization said its revenues totaled $239-million in the informational tax return it filed for 2011.

But in its latest audited financial statement, World Help says the accurate figure is much smaller—just $17-million. In 2012, the group says, it raised $25-million. The nonprofit said it grew 940 percent over five years.

The Chronicle found that World Help’s big donors said they never gave the medicines it claimed. Three charities—Catholic Medical Mission Board, Cross International, and Direct Relief International—told The Chronicle that they did not donate roughly $350-million worth of medicines over three years to World Help, as listed in the Virginia charity’s tax filings.

Donated medicines have been a source of controversy. Charities sometimes record the goods as revenue when they play only a small role in their procurement or delivery, like helping to pay some of the costs of shipping them abroad.

It can also be difficult to determine the value of the donated medicines, making it easy for nonprofits to say the items are worth more than they are.



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, Newsweek.com, 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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