Beware of fraudulent charities

People are back from vacation. Children are back at school. And everyone is back at work. So–in the darkening evening, while trying to sit down to a healthy dinner, you can expect those knocks at the door, and ringing phone calls, soliciting money for medical charities. But make sure you do some research before you donate.

Most charitable contributions support more of the same old, same old–like the pink ribbon crowd I warned you about recently.

These large medical charities, and their sibling “disease of the month clubs,” are an industry unto themselves. They are good at marketing and guilt-tripping. But they haven’t been very good at investing in truly innovative approaches to solving our biggest health problems.

An entire “work” force, to use the term loosely, of bureaucrats manage these non-profit organizations. This industry helps populate the streets of Washington, D.C. on the other side of the government’s revolving door.

Plus, their bosses select these bureaucrats using politically correct criteria, rather than looking for any real achievement in the field. (The academic ivory tower now uses the same lame, politically correct criteria.) But of course, you don’t need any real ability or achievement to get and then give away someone else’s hard-earned money. Just look at the government itself.

Plus, there are too many examples of outright fraud…

In fact, the New York State Attorney General (NYAG) recently accused one medical charity of pocketing nearly $10 million of well-intentioned donor contributions.

According to the allegations, the “National Children’s Leukemia Foundation” (NCLF) fraudulently raised $9.7 million between 2009 and 2013. But less than one percent of the money actually went to help children with leukemia!

Zvi Shor, who has a felony bank fraud conviction on his record, ran the operation out of his basement in Brooklyn. Apparently, he hired professional fundraisers to do the dirty work for him. They collected $8.9 million and Shor paid them $7.5 million (83 percent) of the money they raised.

That kind of return on investment is even worse than most government programs, which pay government bureaucrats to “administer” the giving away of our tax dollars.

Still–Shor made a bundle. He shifted $655,000 (about five percent) of the leftover funds to a shell organization in Israel run by his sister, supposedly for research purposes. Plus, he paid himself a $600,000 salary and another $600,000 in “deferred compensation.” That left one percent of the funds for children with leukemia, according to NYAG.

CNN reports the foundation disconnected its telephones and shut down its website.  (Maybe they didn’t have enough left over to pay their Comcast or Verizon bills?)

Bottom line?

Beware of professional fundraisers and their pitches. Question the credentials of the organizations who come soliciting to your door, or over the phone. Register your phone with the Federal Trade Commission’s national “do-not-call” list. Especially your mobile phone, as you can get charged for unsolicited phone calls. It takes about 30 days to go into effect, so you can have a quieter October.

And remember, just because a non-profit charity is popular, or well-known, it doesn’t mean it makes good use of your hard-earned contributions. Ninety-nine percent of real medical innovation is done with less than one percent of our collective investment in health and medicine.

The moral of this story, according to the NYAG:

A money tree grew in Brooklyn, and for the proverbial ship that came in, it almost all went to Shor.

Source:

  1. “Children’s Leukemia Charity Sued by NY Attorney General,” Medscape (www.medscape.com) 8/7/2015

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