OK, I said, where are you located?
“West Bloomfield, Michigan,” he cheerily replied.
How long have you been around, I asked.
That’s right. The caller hung up on me without uttering another word. Or rather, the paid outside fundraiser controlling the computer doing its best to imitate a person decided I already was asking too many questions and wanted to move onto someone who might not be quite as inquisitive.
After doing some research, I can see why the call came to such an abrupt end. A better name for this charity would be Foundation for American Fundraising.
By my reading of FAV’s latest financial available statements, no more than 9% of the cash raised from solicitations like the one I received likely went toward the stated mission, listed on its website, “to step in and assist veterans.” Most of the cash went to a fundraiser with a checkered past currently in bankruptcy.
Reputable charities put their latest financial statements on their websites for easy review. Not surprisingly, it did not appear that FAV, which has been around since 1994 (the answer to my unanswered question on the phone), so posted its own data. And the Nevada state government, I sadly have come to learn, is largely useless when it comes to helping donors.
Fortunately, FAV’s stuff can be downloaded from this page on the website of the New York State Attorney General in far-away Albany, N.Y. I invite you to do so and read along. It won’t be boring.
For the year ending December 31, 2014, FAV received $6.1 million in cash donations. Of that sum, $5.3 million–a whopping 85%–went to fees for fundraising and collection of the pledges. The biggest chunk of that, $3.3 million, went to Associated Community Services, a fundraiser in the Detroit suburb of Southfield, Mich., which is just a town or two over from FAV’s base in West Bloomfield.
As they say at the train station, ACS, one of the nation’s largest telemarketers, carries some baggage. In 2013 the company was the subject of a withering profile in the Tampa Bay Times. In 2014 ACS filed for Chapter 11 protection in federal bankruptcy court in Detroit, where, according to the online court docket, it remains to this day.
Earlier this year, the Michigan Attorney General’s Office accused ACS it of making “misleading, deceptive or false statements” in connection with fundraising efforts for a firefighters charity. Also this year, ACS was sued by the attorney general of Minnesota on charges of sending false pledge reminders to persons who had been called on behalf of FAV.
So where did the other $800,000 in cash donations go? On the filings, I saw only about $530,000 spent in cash grants and what I would consider direct program expenses. That’s just 9% of the cash raised. The rest went mainly for management and overhead–a lot considering FAV listed only three employees. That included $46,000 to board members who just happened to have been retained by FAV to provide media services, alcoholic rehab training and office space.
Note that I have been referring to cash donations in and cash donations going out. FAV records also recorded receipt of $1.9 million in donated gifts officially described as “clothing and goods for vets in needs.” This is called gift-in-kind and is a legitimate form of charity gifting. But it is subject to wild abuses in valuation and can make financial efficiencies look better than they really are, since GIK donations usually cost almost nothing in solicitation costs. Cash gifts from donors have little to do with GIK, which is why I am excluding GIK from my analysis here.
FAV gets little love from charity watchdogs. CharityWatch gives it an F; you don’t have to be a student to know what that means. FAV also refused to provide information to the Better Business Bureau Wise Giving Alliance, which issued a report with a dreaded “did not disclose” label, almost always an indication of a charity up to little good.
Yet despite all this negative material on the public record, none other than Republican presidential candidate Donald J. Trump directed $75,600 earlier this year to FAV as part of $5.6 million he gave to veterans charities after throwing a benefit in January. Trump, who has had a few charity problems of his own, said all the recipients were carefully vetted–which, from my perspective, clearly was not done for FAV.
I sent email requests for comment to FAV and ACS and will update this if I hear back. I didn’t bother to contact the Trump campaign, since I think it will be pretty busy putting out other fires over the next two weeks.
Unusual in my experience for a charity, the 2014 financial statement for FAV actually listed cash donations by state. Nevadans coughed up just $5,807. That was the third smallest amount of the 40 states listed, above the $10 out of Iowa and the $205 from Ohio but way below the $548,297 generated in California or the $526,191 from New York. Perhaps Nevada folks know better how to spot a hustle on the phone.