June 23rd, 2024

Some fundraisers pay >90% of the funds to themselves

A network of political nonprofits, known as 527s, misallocates over 90% of donations to fundraising rather than causes. ProPublica's investigation exposes lack of transparency, regulatory loopholes, and concerns over legitimacy.

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Some fundraisers pay >90% of the funds to themselves

A network of political nonprofits, including groups like the American Breast Cancer Coalition and National Coalition for Disabled Veterans, has been found to allocate over 90% of donations towards fundraising activities rather than their stated causes. These nonprofits, known as 527s, engage in political fundraising, influencing elections and supporting broad political causes. ProPublica's investigation revealed that these groups, connected to fundraisers like Thomas Berkenbush, have raised millions but spent little on activities with a clear political purpose. The lack of transparency and oversight surrounding 527 groups makes it challenging for the public to monitor their operations effectively. Despite regulatory actions against deceptive fundraising practices, loopholes allow these groups to continue fundraising for political purposes. The investigation also uncovered connections between these nonprofits, shared vendors, and similar language in their filings, raising concerns about their legitimacy. Efforts to solicit donations from individuals like retiree Laurence Eggers highlight the need for increased scrutiny and transparency within the political nonprofit sector to ensure donations are used as intended.

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Link Icon 21 comments
By @foreigner - 5 months
Many years ago my sister had a job going door to door asking for donations for environmental causes. I was shocked to discover that the people doing the canvassing immediately pocketed half of the donations as they walked away from the door. And that was only the percentage taken by the people on the front line!
By @Frieren - 5 months
"charity spent millions to raise thousands" is a very usual way of tax evasion. The charity owner has parties with friends and family as guests. This is taxes as "charitable work".

Can this be improved? Yes, this was going to be improved but the politicians were invited to a fundraiser where they got good food and some freebies. And then it stopped. Or something like that...

By @welder - 5 months
Only donate to smaller non-profits, get to know them first, find out if the administrators take any income from the non-profit, then make up your mind to donate or not.

For example, one charity I like [0] runs a school and the administrators don't take any income from it.

[0] https://www.dominino.de/spenden-helfen

By @pavlov - 5 months
There are lots of apps to plan and track one's investments. Maybe there should be an app to track one's donations too.

If I could see a history of what was the ROI (in terms of money spent on actual programs) of my monthly donations, and also easily reallocate those donations to other charities, I'd certainly check up on that app every once in a while.

By @SloopJon - 5 months
Although a lot of the comments so far refer to charitable fundraising, this story is about political fundraising, often confusingly similar to charities; e.g., the American Breast Cancer Coalition. The kicker is that some of the parties involved have previously been "banned from all charitable fundraising for life."
By @rqtwteye - 5 months
Go to Northern VA. There are a lot of mansions owned by non profit higher ups.
By @sparcpile - 5 months
Charities can hide their percentages when they self-deal with people on their board. It's highly unethical.

Wreaths Across America is notorious for this. All the money they raise goes to the wreath making company that the board members own. When they put out RFPs, as per legal requirements, Worcester Wreath Company is always sole-source provider. https://popular.info/p/the-truth-about-wreaths-across-americ...

Worcester Wreath Company lost its contract with LL Bean due to their bad busines practices. Wreaths Across America was created by Morril Worcester as a way to sell more wreaths. It's a grift all the way down.

https://files.mainelaw.maine.edu/library/SuperiorCourt/decis...

By @Waterluvian - 5 months
One of the many satisfying things about local volunteering is that 100% of your investment goes to the cause, and you get a first person view on what tools or materials the team/club/class could use if you're thinking of donating more than just your time.
By @jcdavis - 5 months
For an absolute wild docuseries about one of these related scams, check out Telemarketers on HBO.
By @wdh505 - 5 months
I have prepped some tax returns for non profits (990) in the usa, and all are publicly available on guidestar.org and you can see the amount paid to the board and key employees like ceo. It would be cool if the information was easier to compare.
By @daft_pink - 5 months
If you want to see a whole documentary that really outlines and emphasizes this point, the ‘Telemarketers’ documentary follows a few workers for a police lodge hotline that also keeps 90% of the revenue for themselves.
By @toomuchtodo - 5 months
ProPublica 527 Explorer Database: https://projects.propublica.org/527-explorer/
By @nytesky - 5 months
yeah, this is been one of the most difficult parts about becoming an adult was realizing that so many nonprofits are basically just self-serving jobs programs.

especially when the CEO can be paid "market rate."

By @apantel - 5 months
Yes, it’s called running a “charity”.
By @RecycledEle - 5 months
Unfortunately, prosecutors rarely go after nonprofits for fraud. This has led most grifters into the nonprofit sector.
By @lettergram - 5 months
Yeah, pretty much better off for society offering low-interest loans to people trying to start businesses. That can produce value and jobs in products that other people value. A rising tides raise all boats, so to speak.
By @ChainOfFools - 5 months
Wait till they find out about the Human Fund