Two fraudulent “cancer charities” agreed last week to a settlement that banned them from doing charitable business after scamming more than $75 million from well-meaning donors across the country.
A press release from Attorney General Derek Schmidt said a lawsuit was filed in U.S. District Court in Arizona against Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services, and the Breast Cancer Society in May 2015 after authorities nationwide investigated them.
The complaint alleged they held themselves out as legitimate charities with nationwide programs giving direct support to cancer patients, although this was a sham.
Under the terms of last week’s settlement, Cancer Fund of America Inc., and Cancer Support Services Inc. were dissolved and banned from operating as charitable organizations or doing charity fundraising. The president was permanently banned from operating any charitable organization.
Children’s Cancer Fund of America and the Breast Cancer Society reached a settlement in 2015.
Most funds donated to the scam charities won’t be recovered but any that are will be given to legitimate cancer charities and used to cover litigation costs, the press release reads.
Directors of area charities offer tips for finding out how donated money will be used.
Angie Tatro, executive director of the Central Kansas Community Foundation, the administrative agency for the Florence, Goessel, Hillsboro, and Peabody Community Foundations, said she tells donors several things to consider.
“I tell them to find a cause or charity that they care about,” Tatro said.
Then find out if it’s a legitimate charity, Tatro said.
“Finding out today can be a little bit difficult,” she added.
A bonafide charity should be a 501(c)(3) organization, Tatro said.
GuideStar is one tool to find out if the charity is legitimate, Tatro said. She recommends looking at the charity’s 990 tax filing.
“We’re supposed to be filing our annual reports that show the financial status of the organizations,” Tatro said.
Looking at the charity’s website, if they can afford to maintain one, is another way to gather information, Tatro said. That lets donors know if the organization takes time to keep donors updated.
Tatro also said to look at what kind of difference the organization is making.
“I’m a big believer that no matter the size of the gift, the donors should know,” Tatro said.
Tatro pointed out that any organization has administrative costs, but those should not be a major part of the budget. She believes that if administrative costs are less than 20 percent, that’s a perfectly legitimate amount.
“You don’t want those charitable dollars going only to those administrative costs,” Tatro said. “I encourage people to get to know the charities they want to donate to. Ask for a tour, talk to the executive director. I love it when people call the foundation and ask for more information before they write the check. I think that’s due diligence.”
She also likes to see people giving to local charities that help in their own communities.
“The other thing is, it’s kind of donor beware,” Tatro said. “Do not give your credit card number over the phone to make a gift. We would direct you to a portal to make a gift. That’s a safe place to make a gift.”
Tatro added that there are other ways to donate.
“Never minimize the value of your volunteer time, not just your financial donation,” Tatro said. “That might be how a donor can get in the door and get to know the organization before they give.”
Jon C. Wiebe, president and CEO of Mennonite Brethren Foundation, said he encourages people to know the charity they are dealing with.
“Personally I definitely encourage people to know the charities they give to,” Wiebe said.
People often get calls or letters asking for donations to charity, but don’t know about the organization.
“The first problem with phone solicitation is you don’t even know if it’s real,” Wiebe said. “I just strongly caution against getting involved with those kinds of things. I tell people I want to see some literature, and I usually hear nothing further.”
A resource Wiebe recommends for church-affiliated charities is the Evangelical Council for Financial Accountability. According to the website, ecfa.org, ECFA was founded in 1979 to provide accreditation for Christian nonprofits who demonstrate compliance with standards for accountability, board governance, and fundraising.
“They can ask if they are part of ECFA, or they could contact ECFA and find out,” Wiebe said. “They have a membership roster.”
Secular charities can be researched elsewhere, Wiebe said.
“To me the biggest thing is knowing the charity personally,” Wiebe said. “You build a connection with them.”
Charity Navigator, an independent nonprofit watchdog organization, offers these additional tips on their website:
- Eliminate the middleman. For-profit fundraisers, often used in telemarketing campaigns, keep a large portion of the money they collect. Donors who like what they hear in the pitch can investigate the charity and send their contribution directly. Donors may want to reconsider supporting a charity that uses a telemarketing approach.
- Be careful of sound-alike names. Donors are easily confused by charities with strikingly similar names. Take time to uncover the difference.