Today, the business of charitable fundraising is vastly more sophisticated. This is a blessing and a curse. “Excellent charities succeed because their resources are not tied up in fundraising,” says the highly regarded online guide Charity Navigator. Unfortunately, many veterans’ charities tend to allocate more than their civilian counterparts to administration, direct mail and other for-profit fundraising services. In most such cases, the problem is simple inexperience compounded by the belief that enthusiasm for the cause will ensure success without resorting to exorbitant overhead and fundraising expenditures.
Then there are groups like the impressively named American Veterans Relief Foundation, a prime target of congressional investigators in 2007-08 hearings. The foundation raised $3.6 million, of which less than 1 percent went to assist vets. It was an extreme case, to be sure, but not a unique one. Those hearings raised awareness of the problem without offering a legislative solution. A Donors Bill of Rights could, for example, require that prospective contributors be told upfront how much of their gift will support a charity’s stated mission. Think of it as consumer protection for charitable donors. Enactment isn’t likely, however, as courts up to and including the Supreme Court have frowned on fundraising regulations as potential violations of the First Amendment.
Oversight of charitable giving has been left largely to the states, where many attorneys general have stepped up efforts in recent years to identify fraud or misuse of donated funds. These are crimes subject to prosecution, unlike a bad business model, poor judgment or excessive payments to telemarketers and other solicitors. The good news is that media coverage has also helped keep this issue front and center since the congressional hearings into the American Veterans Relief Foundation. The bad news is that the media have no shortage of alleged scams to expose. Earlier this month a trial date was set for the purported mastermind behind the U.S. Navy Veterans Association, a bogus charity with a nonexistent board of directors and a post office box for a headquarters that is reported to have bilked unsuspecting donors of more than $100 million.
Fortunately, there are plenty of honest, admirably run veterans’ charities deserving of support. My own list includes Honor Flight Network, which brings World War II vets to Washington to visit their memorial on the Mall, and Fisher House Foundation, which provides free housing to service members’ families at dozens of military and VA medical centers. This enables relatives to be with their loved ones in uniform when their presence is needed most.
If you want to help servicemen and women in their transition to civilian life, exercise the same due diligence you’d apply to any significant purchase or investment. Don’t hesitate to kick the tires or demand the equivalent of a test drive. If you’re contacted by fundraisers, be prepared to ask some questions in return. Confirm the organization’s tax-exempt status. Find out how much of your gift will go to the intended recipient and how much to administration or fundraising. Better yet, ask the group to put its appeal in writing and then review its financial stats and spending record on Web sites such as Charity Navigator. As Ronald Reagan said in a different context: Trust but verify. Check them out before you write a check.