This document discusses issues with some charity organizations and how donation funds are used. It notes that while some charities do help those in need, many use most donations for operational costs, administrative salaries, and marketing instead. Some charities are even complete scams that don't help anyone. The document advises donors to research charities to verify they are legitimate and that a significant portion of funds go to the actual cause. Cause marketing partnerships between for-profit companies and charities are also criticized as mainly benefiting the companies. Large charity events on TV are noted as being very expensive to produce.

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Sarah Lux
Prof. Braun
ENG- 123
October, 12 2014
Charity Scams: What Goes on Behind the Scenes?
After extensive research on charity organizations, opinions are founded leading many
donors to believe that they are helping a cause. The benefit of their donation will aid those in
need, and be an easy tax right off. What these donors are unaware of is the amount of donations
that do not get to those in need. Research shows that operational, administrative, and marketing
cost use most of the funds to pay for the charity to actually exist. Not all organizations are scams
though; some do put forth the effort to make sure that most of the donations are presented to
those in need of help. Unfortunately, those who use donors for their personal gain have ruined it
for many hard working organizations out there. The goal of this research is to provide
information that shows some charity organizations that presume to raise funds are complete
scams. Donors cannot easily identify copycat organizations versus the legitimate organizations,
the cost for marketing campaigns is outrageous, and the amount of money that actually goes to
the cause is minimal.
Many donors have donated in honor of someone, or something that they believe in.
Whether it is breast cancer, because it runs in their family, or ALS, because they were nominated
to do the Ice Bucket Challenge, regardless of the reason, many can relate. Also donors are faced
with organizations that may not have their donation in the right frame of mind. There are so
many people out there, who are not truthful about how they are going to use donations for the
cause. With recent social media outbreaks of challenges, and links to donate, donors have to be

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aware of the risk involved. According to The Truth behind Social Media – Driven Donation
Campaigns by Anthony Gucciardi and Mikeal Thanen, “ Because social media is so popular and
user friendly, ads are using links to websites to make donations that may not be legit” (Gucciardi
et al. 2014). Furthermore, the funds that are actually being donated could be used for personal
gain, not even remotely close to what donors are actually donating to. Many examples are out
there, but one in particular, “The “Hope for Haiti” campaign, after the shock of the earthquake,
revealed the campaign to be part of an undeniable attempt to create support for military
intervention into Africa” (Gucciardo et al. 2014). Awareness and doing your homework is
crucial.
Many organizations, may also camouflage themselves as another legit organization, by
using a similar title or business name. Cable News Network (CNN) reports by Chris Hundley
brought to light an organization in Florida called Kid’s Wishes, much like Make a Wish
Foundation, using donations to fund founder bank accounts, while also confusing donors to make
donations. Donors assumed donations would be used for children, when in reality; they were
used for personal gain (Hundley 2014). While using a similar name is not against the law, and
many believe that there is a clear difference, and donors need to do their research, donors who do
donate to what they think is a reputable company or affiliated because of the name similarity,
may not be.
Making the decision to donate can be made easy, and safe. The Federal Trade
Commission (FTC) provides many outlets for donors to make an informed and educated decision
on who to donate to. They provide a checklist, along with warning signs to look out for when it
comes to making a donation (Consumer information, 2014). The Better Business Bureau (BBB)
also warns of scammers, who are “bottom feeders” that bank on emotional tragedy (Be careful

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before you donate to Charities, 2012). Along with that, the Better Business Bureau also gives
these helpful tips for consumers:
 “Do some simple research. Verify the fundraiser's legitimacy by doing some online
searches. Check out their contact information and look to see that this specific fund or
organization has been publicized by news outlets.
 On-the-spot donations to solicitors are not recommended. Instead, take down their
information on which they are and invest a few minutes in verifying it.
 Consider the tax issues. The IRS rules, requirements and standards for traditional
charitable organizations do not apply to individuals. Such donations are not usually tax
deductible if that is an issue for you. There may be complications as well for the
individual recipient of direct donations as opposed to donations received through tax-
exempt charitable organizations.
 Watch out for charities that have very similar sounding names as well known charities.
It may be an attempt to confuse donors into thinking they are in fact giving to the
charitable organization with the famous name.
 Don't donate over the phone. It is too difficult to verify that the person on the other end
is who they say they are. Donate either at the organization or by mail to a verified
address or on a secure website.
 Don't pay with cash. Use a check or credit card. Never pay with a wire transfer of
funds.
 Refuse any high-pressure appeal. If they are legit they can wait a day or two for your
donation.
 Check out the charity with the BBB”

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(Be Careful Before You Donate to Charities, 2012)
Always do your research about a charity organization, and ask questions so you can be better
informed about where your money is going.
Marketing is also a huge part of any business, including charity organizations. Bringing
awareness to a specific cause can bring millions of donors to jump on the donating train. While
the object is to create a barrage of people to come together with a commonality, it can also be a
money maker. In line with this aspect we see “Cause Marketing” according to Parker Molley in
her article Breast Cancer Awareness Month is a Scam. She goes on to explain that this type of
marketing is “for-profit companies to partner with not for- profit companies, often consisting of
promotions that promise a set percentage of proceeds on select items will go to the non-profit
organization” (Molley, 2013). Many examples include the NFL “Catch for Cure”, KFC “Buckets
for Cure”, and Yoplait “Save Lids to Save Lives”. Molley further explains that even though
these do bring awareness to the cause of breast cancer, in no way does this actually benefit lives.
She specifically narrows in on KFC campaign explaining that:
“Komen’s partnership with KFC reeked of cause dissonance. The supposed goal of this
promotion was to “save lives,” but in reality, heart disease remains the leading cause of
death in American women. One 8 piece bucket of KFC extra crispy chicken contains 2,380
calories and 160 grams of fat. Even if you split that bucket among 4 people, you’re still
looking at 595 calories (60% calories from fat) and 40 grams of fat. Additionally, the launch
of the “Buckets for the Cure” campaign coincided with the launch of KFC’s double-down
sandwich, featuring pieces of fried chicken as the “bread” of the sandwich. You’re either
trying to save our lives or you’re trying to kill us. Pick one, KFC” (Molley 2013).

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Even though it is very agreeable that there is a need to bring awareness to this awful cause, there
are, however, better ways than this. Campaigns like these convince buyers that if they are going
to spend money anyway, why not feel better about it, because companies such as KFC will
donate some to the cause for them. But in reality, these for-profit companies are just that, for
profit, and only looking at the bottom dollar.
Another huge debate that many donors run into is cancer research in general. As a donor,
there is a lack of knowledge as to what amount of money and time goes into researching a cure.
More in depth, Robert Ryan, author of Cancer Research- A Super Fraud, explains that “A large
portion of money donated to cancer research by the public is spent on animal research which has,
since its inception, been widely condemned as a waste of time and resources.” This brings to
light that, in fact, donors that donate, may have the right idea, but unfortunately because cancer is
a billion dollar industry, there is more benefit in not funding a cure versus finding one. Even
two-time winning Noble Peace Prize winner, Linus Pauling PhD is quoted “Everyone should
know that most cancer research is largely a fraud and that the major cancer research
organizations are derelict in their duties to the people who support them” (Ryan, 2013). This
begins to raise questions in donor who do donate, what donors are really donating to.
To continue this argument, we now focus on the infamous television programs, Stand up
for a Cure (American Cancer Society), Farm Aid 2014, and Red for Aids. The cost of a
celebrity’s time is precious, and so are those people in the background answering the phones to
take donations. It can be argued that this is all for charities, free time, free everything, to put this
huge production together. It is not believable that Fox News would interrupt their regular
programming for a free, charitable concert. The cost to put on these productions is totaled at
thousands of dollars, and even though many may be giving, by giving their time, it still cost

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money to bring it to consumers. The cost of tickets, and broadcasting out to millions, and the
amount of money that the productions crew gets for making sure the production goes smoothly
and on time is just some of the money spent. Amazingly enough, these productions have raised
billions of dollars for cancer research and other causes, making headway for future endeavors in
the field. Arguably, donors still find Ryan’s article compelling enough to take a step back and
really look at the cost of the marketing that goes into raising awareness.
With the good intentions to help those in need, and the work that goes into making a
cause known, we run into the bad. Millions of dollars donated being used for personal gain,
pocketed for a family vacation home in the Hamptons, or used to fund CEO’s lavish life styles
have come into the spot light as more and more news reports look into financial records of
certain charities. First, let’s look into the case of Goodwill, a company with a focus to bring
money back into the community, by taking donated items from willing donors, in turn, giving it
back by providing job training, and helping those in need (What Happens to your Donation,
2014). But according to a blogger, Chris Janota, because of Goodwill’s growth “in the last 10
years, 85- 95% of profits have actually been funneled into new store openings and their online
and mobile presence” (Janota, 2012). Digging deeper into this complex statement, Janota also
reveals:
“In 1999, then Goodwill CEO David M. Cooney made $209,153: not bad. This, however,
was about the time that Goodwill began implementing its growth plan. It was at this time
that George W. Kessinger took over as CEO of Goodwill Industries International, in 2001,
after 24 years as Orange County Goodwill president. As CEO he now earns over 1 million
per year” (Janota, 2012).

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This is just the tip of the iceberg, when it comes to cases involving chief executive officer’s and
founder using donations for personal use. Looking back to the case of Kid’s Wishes, reported by
Chris Hundley, “In the past decade alone, Kid’s Wishes has channeled nearly $110 million
donated for sick children to its corporate solicitors. An additional $4.8 million has gone to pay
the charity's founder and his own consulting firms” (Hundley, 2013). Certainly, this brings into
question other charities and how they use donations. This unfortunately isn’t a one-time event;
there are many other cases of donations being used for other reasons than to help a cause.
Furthermore, fights are erupting, causing more donor concerns when it comes to actually
making a donation. Several cases of charities, who are out right not getting the donations period.
A Canadian organization helping shelters for woman and children claim to not have received
funds from a plate fundraiser (buy a meal, half gets donated), ultimately sparking an
investigation into the agreement (Stewart, 2006). Other examples range from cases in various
places, resulting in organizations reaching out to authorities to investigate people who allegedly
collected funds for charities, but did not divvy out what was collected. With an already skeptical
donor, these incidents further justify actions to just disregard donating at all.
Pushing forward, alone we cannot just look at chief executive officer salaries, and
incidents involving funds not being received. Donors need to question how much is actually used
toward the cause. Again looking into Hundley’s report, Above the law: America’s Worst
Charities, less than three cents on the dollar are actually used by Kid’s Wishes (Hundley 2013).
This however isn’t isolated, “Cincinnati residents donated a whopping $2.1 million in 2000, and
only $533,066 – an average of 25.4 cents from each dollar actually reached it intended
beneficiaries” (Ludlow, 2001). We again force ourselves to look back at all the money donated
to charity organization using funds to pay outside resources to drum up donations, and

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operational cost. Keep in mind that even though donors are supporting those who need our help,
there are many hands in the cookie jar, making the donation dwindle into less and less actually
used for the research, and the helping those in need.
There are some charity organizations that exclude pertinent information to unsuspecting
donors donating to false causes, and use marketing ploys to reach their bottom line. Eventually
this leaves less than a normal percentage of donations for those in need, and more for the
organizations pocket books, and bill collectors. Donors need to protect themselves by doing the
research, and ask questions when your pressured to donate. Not all organizations are out there to
fraudulently take donor money; there are organizations that thoroughly help those in need,
bringing attention to causes that are very serious. But be aware of those who aren’t and make
sure to protect yourself by taking caution when making a donation. Bad experience screams out
to donors, who can be naive to think that all people want to do is help. Because so much money
is used unwisely, makes some believe that this is worth pursuing and to assure that everyone
stays informed about organizations who take advantage of people wanting to make a difference
in someone else’s life.

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Work Cited
"Consumer Information." Before Giving to a Charity. N.p, N.d. Web 13. Sept. 2014.
Gucciardi, Anthony, and Mikeal Thalen. "The Truth Behind Social Media-Driven Donation
Campaigns." Infowars. Digital Millenium, 28 Aug. 2014. Web. 07 Sept. 2014.
Hundley, Kris. "Above the Law: America's Worst Charities." CNN. Cable News Network, 13
June 2013.07 Web. Sept. 2014.
Janota, Chris. "The Case Against Donating to Goodwill." Garage Sale Rover. WordPress.com,
17 Apr. 2012. Web. 07 Sept. 2014.
Molley, Parker M. "Breast Cancer Awareness Month Is A Marketing Scam." Thought Catalog.
Nrelate, 7 Oct. 2013. Web. 07 Sept. 2014.
N.D. "What Happens to Your Donations - Goodwillakron.org." Goodwillakronorg. Goodwill,
2014. Web. 07 Sept. 2014.
Randy Ludlow Post, Ohio B. "Fees Slice Charity Donations." Cincinnati Post: 0. Jul 2
2001.ProQuest. Web. 25 Sep. 2014 .
Ryan, Robert. "Cancer Research - A Super Fraud?" Cancer Research - A Super Fraud?
CAFMR, Jan. 2013. Web. 07 Sept. 2014.
Stewart, John. "Charity Questions Donation." Mississauga News: 01. Apr 06 2006. ProQuest.
Web. 25 Sep. 2014 .
The Better, Business B. "Be Careful when Making Donations to Charities." The Hutchinson
NewsAug 05 2012. ProQuest. Web. 25 Sep. 2014