Oct 31, 2008 7:06 pm US/Eastern
I-Team: Cashing In On Charity Money
Click Here To Search The Database
MIAMI (CBS4) ―
Hundreds of viewers have responded to a
CBS4 I-Team investigation into YOUR money and how local charities spend it. Hundreds of people have already used a special search engine the
I-Team set up to check the state records on every non-profit doing business in Florida.
As part of this project the
I-Team uncovered hundreds of charities that, according to State of Florida and IRS 990 records from 2006 (the latest data available) spend all the money they get on overhead including administration, salaries, travel, advertising and even more fundraising.
In the second part of his project,
I-Team investigator Stephen Stock digs further into the numbers and the explanations by some charities to find a few wrinkles beneath the data.
At Cross Road Food Bank in Fort Lauderdale, volunteers and paid staff work non-stop feeding as many as 10 thousand needy people a month from piles of donated food.
"All the small food drives that we have." It (the food donations) all comes here," said Cross Road Food Bank founder and director Don Adams. Tax records show and Adams confirms that neither he nor any of his family receives any salaries or compensation for running the Food Bank. The Food Bank, through donations, does pay salaries to office personnel and managers. Most make about $14 an hour.
But to look at the Food Bank's tax records you'd think it was spending all its donated money raising more money. In fact, state records list Cross Road as spending 100% of the 22 thousand dollars it raised on fundraising.
But take a closer look. By digging into more tax records, the
CBS4 I-Team found in the Cross Road Food Bank a charity barely able to make financial ends meet in tough economic times.
"We rely on totally on grants that's been coming in and helping us. But with the increase it hasn't been enough," said Adams.
And because much of the donations at the Cross Road Food Bank come in the form of food, it is not reported on the charity's tax forms as income. So tax records show all of the financial contributions as overhead. In other words what little money is donated outside the food donations are reported as administrative and fundraising costs.
That's why Harve Mogul at Miami-Dade's United Way says to be a good giver you should look beyond a charity's bottom line.
"People are generous but not necessarily thoughtful," said Mogul, president and CEO of the United Way of Miami-Dade.
"Just because a charity's overhead may be high it is not necessarily a predictor of an agency that's not doing a good job," said Mogul. "It may be simply that it costs more to provide a particular kind of service."
But there are plenty of charities with questionable spending priorities.
The
CBS4 I-Team dug through a massive database of every charity operating in Florida. We reviewed 18,575 different records of individual charities which conducted business in the Sunshine State and reported their information to Florida government in 2006.
The data came from Florida's Department of Agriculture's Division of Consumer Services, Division of Consumer Services. The database is based on charities' IRS 990 tax forms from 2006, the latest data available. It is the same data available in the "2007-2008 Gift Givers' Guide; A guide to Charitable Giving in Florida."
The records showed at least 581 charities in Florida spent all their donations on administration and savings. Another 38 charities spent all the money they raised raising MORE money and putting the rest into savings.
"There is so much need in society and the dollars available for donations are shrinking," said Daniella Levine of the Miami-Dade Human Services Coalition. "We can't afford to be wasting our money on things that are not truly having an impact."
As part of its services, the Human Services Coalition provides guidance to other charities as to how to report and prioritize income. The Coalition offers seminars to charities on how to fill out IRS 990 forms.
"And it might be that a charity is really doing some good work but spending 50 cents on the dollar to do it might not be the most efficient way to do it," Levine said.
An example of a near 50/50 split: the famous and well attended Phil Peterson's Poker Run to Key West. According to state records the Poker Run reported that 45% of the 156 thousand ($156,686) raised last year went to expenses instead of to an actual charity. And just over half the money ($84,881) raised actually went to two different non-profit charities.
"We support the diabetes research institute of Jackson Memorial Hospital and the Key West Sunrise Rotary Club," said Drew Peterson of the Phil Peterson Key West Poker Run.
Another, more extreme, example of a charity that spends a disproportionate amount of its money on overhead is the Florida's Highway Patrol Command Officers Association. Florida State Department of Agriculture records show the non-profit took $3,506,319 in donations ($3,506,319) in 2006.
But the Association reported spending only 4% ($133,309) of that money on charitable programs. The state records show the FHP Command Officers Association, Inc. spent 93% ($3,234,180) of the money it raised in 2006 on more fundraising.
CBS4 experts say, as a rule of thumb, you should ask more questions and raise concerns if a charity spends anything over 30% of the money it raises on overhead.
That includes both administration and fundraising costs.
And there are plenty of charities that exceed those spending levels. We made it easy for you to check them out.
Just
click on the link to the searchable database.
There you will find a page with spaces to type in the name of a specific charity or just a city where a charity is located.
The search will take you to the database from Florida's Department of Agriculture and Consumer Services of every non-profit operating in Florida. The information comes from 2006 IRS tax information filed by every charity operating in the state of Florida.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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