8 Veterans' Charities Gave LESS THAN 1/3 of $$ to Causes

Philip Rucker at the Washington Post has the scoop on the fraud happening at veterans' charities:

Americans gave millions of dollars in the past year to veterans charities designed to help troops wounded in Iraq and Afghanistan, but several of the groups spent relatively little money on the wounded, according to a leading watchdog organization and federal tax filings.

Eight veterans charities, including some of the nation's largest, gave less than a third of the money raised to the causes they champion, far below the recommended standard, the American Institute of Philanthropy says in a report. One group passed along 1 cent for every dollar raised, the report says. Another paid its founder and his wife a combined $540,000 in compensation and benefits last year, a Washington Post analysis of tax filings showed....

...But the institute's report suggests that 20 of the 29 military charities studied were managing their resources poorly, paying high overhead costs and direct-mail fundraising fees and, in some cases, providing their leaders with six-figure salaries.

The 12 charities rated as failing by the institute -- including the Military Order of the Purple Heart Service Foundation, the AMVETS National Service Foundation and the Freedom Alliance -- collected at least $266 million in the past fiscal year....

...Borochoff said many veterans charities are "woefully inefficient," spending large sums on costly direct-mail advertising.

"They oversolicit. They love to send out a lot of trinkets and stickers and greeting cards and flags and things that waste a lot of money that they get little return on," said Borochoff, who plans to testify before Congress today.

The philanthropy institute gave F's to 12 of the 29 military charities reviewed and D's to eight. Five were awarded A-pluses, including the Fisher House Foundation in Rockville, which the institute says directs more than 90 percent of its income to charitable causes.

One group received an A, and one received an A-minus.

Jim Weiskopf, spokesman for Fisher House, said the charity does not use direct-mail advertising. "As soon as you do direct mail, your fundraising expenses go up astronomically," he said.

One egregious example, Borochoff said, is Help Hospitalized Veterans, which was founded in 1971 by Roger Chapin, a veteran of the Army Finance Corps and a San Diego real estate developer. The charity, which provides therapeutic arts and crafts kits to hospitalized veterans, reported income of $71.3 million last year and spent about one-third of that money on charitable work, the philanthropy institute said.

In its tax filings, Help Hospitalized Veterans reported paying more than $4 million to direct-mail fundraising consultants. The group also has run television advertisements featuring actor Sam Waterston, game show host Pat Sajak and other celebrities.

Chapin, 75, the charity's president, received $426,434 in salary and benefits in the past fiscal year, according to a filing with the Internal Revenue Service. His wife, Elizabeth, 73, received $113,623 in salary and benefits as "newsletter editor," the Post's review of the tax filing showed....

...Rick Cohen, an expert on nonprofit groups and former executive director of the National Committee for Responsive Philanthropy, called the spending decisions of some charities "grotesque."

"I think in light of the Iraq war and the Afghanistan war, these veterans are the people who we should really be protecting and not using as excuses or avenues for ripping off charity philanthropy," Cohen said.