Little money actually goes to causes: Charity investigation

An investigation into some of America's worst charities shows that most donations go to paying telemarketers and the executives who run the organizations.

Is your donation actually going toward a good cause? It's a question many people have, and now there's a way for some donors to find out.

A yearlong investigation by the Tampa Bay Times and the Center for Investigative Reporting in partnership with CNN identified 50 charities across the U.S. that raised more than $1.4 billion in the past 10 years but spent less than 4 percent of that money directly on terminally ill children, burn victims, cancer patients, diabetes research, crime victims, veterans and police and firefighters.

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Most of the funds raised by these "money machines," as the report on the investigation called them, went to the charities' operators and professional solicitors, some of whom can be heard calling potential donors in this video.

Using federal and state records, the investigation identified a list of what it called the 50 worst charities in America. Taking the top five spots were the Kids Wish Network, Cancer Fund of America, Children's Wish Foundation International, American Breast Cancer Foundation and Firefighters Charitable Foundation, the report said.

The investigation found that Kids Wish Network raised millions but that "less than 3 cents on the dollar" was spent helping dying children and their families, according to the report.

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"Most of the rest gets diverted to enrich the charity's operators and the for-profit companies Kids Wish hires to drum up donations," the report said.

"In the past decade alone, Kids Wish has channeled nearly $110 million donated for sick children to its corporate solicitors," according to the report, while an "additional $4.8 million has gone to pay the charity’s founder and his own consulting firms."

According to the report, watchdog groups say only 35 percent of donations should go toward fundraising costs. As for direct cash donations, there's no standard for how much money can be spent.

Melissa Schwartz, a spokeswoman for Kids Wish, told the Tampa Bay Times that the charity hires solicitors so its staff is free to work with children. Donors who give directly to Kids Wish instead of in response to solicitors ensure that all of their pledge will be spent granting wishes for sick children, Schwartz said.
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