BBB: Fraction of money raised by charity benefits cancer victims

By CHRISTOPHER QUINN

The Atlanta Journal-Constitution

Research the charity before you write the check.

That’s the warning the Better Business Bureau is giving Georgians about a cancer charity that Internal Revenue Service records show spends most of the cash it raises on itself rather than helping patients.

“...donors should know that only a fraction of their donation will provide any direct benefit to cancer victims and their families,” said Fred T. Elsberry Jr., head of the Atlanta BBB office.

The family that runs the Cancer Fund of America, with an office in Tennessee, say the BBB’s assessment of how it spent and distributed $14 million in money and donated goods it received is unfair and that its record of spending is improving.

“They are truly ignorant on what they are reporting,” said James Reynolds Sr., CEO of the charity.

It is not the first time Cancer Fund of America has been questioned in Georgia. In 2007, the charity paid $50,000 to a Georgia cancer victim’s group after the Governor’s Office of Consumer Affairs said its solicitations were misleading.

The solicitations claimed it drove patients to receive care. It didn’t. It claimed to supply medications. It didn’t. And its direct-mail solicitations mimicked government correspondence, according to Fulton County Superior Court documents.

Reynolds, blamed professional fund-raisers for the problems.

“I have fund-raisers who write the mail and the reports, and sometimes it’s a lot of legalese to me,” he said.

The charity corrected its mailings and have been monitored by the Governor’s Office of Consumer Affairs. That leaves the BBB unimpressed.

Bill Smith, the St. Louis-based BBB investigator who looked into the charity, said 2007 IRS documents show Cancer Fund of America raised more than $8.8 million in cash, but spent more than $8 million on fund-raising. Donors also gave the charity more than $5.8 million in in-kind gifts, such as personal hygiene products.

The IRS documents show the charity gave $6,010 worth of in-kind gifts to three Georgia cancer-support groups.

Gail Hough, director of Blue-Gray Community Hospice in Fitzgerald, said the hospice receives items such as toothbrushes and lip balm that it gives out to terminally ill patients. Other items the charity gives out include adult diapers, surgical gloves, vitamins and nonprescribed medications.

The two other Georgia agencies on the donor list could not be located.

The largest part of the charity’s giving was donated goods — more than $3.4 million.

It spent about $2.2 million on salaries, cars, operating costs and other services, such as publishing and mailing cancer education material. That means it spent on operations or gave away $5.5 million, out of the $14 million raised.

Cancer Fund of America gave $63,000 in cash, less than 1 percent of the $8.8 million it raised, Smith said.

He also noted the IRS documents show the charity gave large amounts of money to charities that have nothing to do with cancer, such as the $317,707 in-kind gifts to Angelic Ministries in Knoxville.

Betsy Frazier, Angelic Ministries’ founder, said she receives items such as shampoo, pain relievers and toothpaste from Cancer Fund of America. Her ministry helps the poor and people in crisis, some of whom are suffering from illnesses, such as cancer, she said. She said she does not have a problem with an agency that puts itself out as helping cancer patients giving to other needy people as well.

“They are a nonprofit,” she said.

Smith from the BBB said, “I think it’s an abysmal way to run a charity. And you can question the salaries they seem to be making, and it’s a pretty close-knit group of relatives that seem to be benefitting.”

Reynolds, two sons and a son-in-law brought in more than $537,000 in salaries and benefits in 2007.

“They say we only spent one percent of our money on patient services, and that is not fair,” Reynolds said.

That discounts the $3.4 million in donated goods that would not be distributed if it wasn’t operating, he said.

Reynolds said its 2008 IRS documents, not yet completed or filed, will show an improvement to spending or giving away 56 percent of donations to its services.

The BBB suggests donors give to charities that spend at least 65 percent of the value of donations on providing services. Charity Navigator, a watchdog organization, suggests even more, at least 75 percent, of donations should be spent on services.

“I guess what we would like to see is when they call to solicit, they would tell people that the vast majority of their donation is going to raise funds, not to serve victims or cancer patients,” BBB’s Smith said.

Tips for finding worthy charities: http://www.charitynavigator.org/

http://atlanta.bbb.org/