Long before New To Las Vegas, I was New To Seattle. And it was in the Emerald City way back in 2012 that I first got called on the phone from a fundraiser for a Holiday, Fla., charity called Kids Wish Network. She asked for a donation to help children with life-threatening conditions.
I asked how much of cash donations went to fundraising as opposed to the children. The fundraiser said she had no current information. That pretty much ended that conversation. After looking up documents online, I had my answer: 74%, meaning barely a quarter of what was raised remained available for everything else, including kids. I wrote up KWN in a withering post headlined “Another day, another dodgy charity calls around Seattle.” You can read it by clicking here.
The next year, KWN popped up as No. 1 on a list put together by the Tampa Bay Times of “America’s Worst Charities.” The once-off roster of 50 was based on two factors: the large amount of money raised over time that went to fundraisers, and the tiny amount of money going out in cash grants in support of the stated mission. The paper flatly called KWN the “worst charity in America.” I can’t say I was surprised by KWN’s ranking.
But here’s something surprising to me. Despite my earlier lashing, a KWN fundraiser asking for money just called me again, this time at the New To Las Vegas world headquarters. The conversation was even briefer. The caller–actually an interactive computer–quickly hung up as I again started asking questions, not even answering one.
And again looking up documents online, the organization seems to me no less sketchy, as I will explain more fully below. Meanwhile, I am nominating KWN for my own long-running list: America’s Stupidest Charities. The criteria is pretty basic: nonprofits that call me asking for money despite being the subject of a previous critical post by me. I mean, can it get any dumber than that? The list of other nominees can be found nearby.
I am relying for my analysis on KWN’s latest available audited financial statements and IRS Form 990, for the fiscal year ending May 31, 2017. You can’t easily find these documents in Nevada. The elected officials in Carson City in charge of charitable regulation–Secretary of State Barbara K. Cegavske and Attorney General Adam Laxalt, both Republicans–have simply ignored a 2013 Nevada law requiring that either full financial statements or the 990 of most registered soliciting charities be posted on the Secretary of State website. (By the way, these law-flouters are both on the ballot in November, Cegavske for her current position and Laxalt for governor).
Fortunately, other states are a lot more interested in helping their citizens. One is New York, where the documents can be downloaded from this page on the Attorney General’s website.
For that one-year period, KWN received $13 million in cash donations. But from that, $11.8 million went straight for activities that included fundraising appeals, such as telemarketing, direct mail, promotion, advertising and processing. That’s 91%, far worse than the 74% I calculated in 2012. In other words, only 9 cents of each cash dollar donated by folks like you was even available for good deeds for children.
By my reckoning, of the remaining $1.2 million in cash donations, only about $300,000 directly funded gifts to kids. That works out to 2 1/3 cents of every dollar donated–even less than the 2½ cents the Tampa Bay Times calculated in 2013. The rest went mainly for executive compensation, overhead and payroll.
Now, accounting rules do allow charities to count some of their fundraising expense as part of the stated mission, as well as some of the overhead and payroll, and the receipt and distribution of non-cash items like, in KWN’s case, toys and travel vouchers. But even by KWN’s own rather generous accounting, its charitable commitment ratio–the percent of total expenses in furtherance of the stated mission–was only 36%. Its fundraising efficiency–the percent of contributions less the cost of fundraising–also was only 36%.
These ratios are terrible. How terrible? The Better Business Bureau Wise Giving Alliance, a leading charity watchdog, says for either metric, anything under 65% is unacceptable. By comparison, at Make-A-Wish Foundation of America, the well-regarded Phoenix-based granddaddy of wish-granting organizations, the charitable commitment ratio for its latest reporting year was 74%, nearly twice as high as that of KWN. The Make-A-Wish Foundation fundraising efficiency ratio was even higher, 82%.
KWN has flatly refused to provide information to the BBB, which evaluates charities on 20 good-governance standards. This is a big red flag to donors. Charity Navigator, another watchdog, gives KWN zero stars on its four-to-zero scale.
It’s certainly possible that would-be donors get KWN confused with the Make-A-Wish Foundation. Make-A-Wish, which does not use telemarketers, has long complained about sound-alike charities. On its web home page KWN states it is not affiliated with Make-A-Wish, but in the smallest possible type in a footnote at the very bottom. KWN also solicits under a variety of other names. According to KWN’s newly filed Nevada Charitable Solicitation Registration Statement–a rather bare-bones disclosure form that allows no meaningful analysis–they include Star Wishes for Children, Project Toy Drop, Hero of the Month and A Child Forever.
Aside from bad press, KWN over the years has experienced regulatory problems, including undisclosed ties between charity officials and private companies that forced the filing of amended tax returns. Currently, the charity is fighting a civil lawsuit filed by a law firm in St. Petersburg, Fla., alleging violations of Florida’s Deceptive and Unfair Trade Practices Act. According to court filings, KWN denies the allegations.
Last week, I emailed a request for comment to KWN about some of the points above and will update this post if I hear back. Wishful thinking on my part, perhaps.