I-Team

MIAMI (CBS4) ― The CBS4 I-Team has discovered that nearly half of all charities operating in Florida spend the money they get in donations on things other than the actual charitable cause you donate to.

I-Team investigator Stephen Stock dug through 19,744 State of Florida charity records to give you the bottom line on how your money is being spent.

The images of small airplanes flying rescue missions over the Florida straits remain one of the most iconic of any non-profit organizations in South Florida. Founded in 1991, the charity, Brothers To The Rescue, flew 2,400 search and rescue flights to save thousands of Cubans fleeing the Castro regime on makeshift rafts and boats.

As the U.S. laws governing the repatriation of those Cubans fleeing the Castro regime changed, so did Brothers to the Rescue's mission.

After the change in U.S. law, coupled with the Cuban shoot-down of two other Brothers To The Rescue planes in 1996, the charity became less active in flying missions over the Florida Straits and more active in raising money for those in need in Cuba.

This September, the charity sold its last remaining airplane for $100,000 to give to this year's hurricane victims in Cuba.

But the CBS4 I-Team has discovered that Brothers To The Rescue is among hundreds of charities that spend all or most of the money they receive in donations on administration and more fundraising, not the actual charitable programs they espouse.

In Brothers to the Rescue's case, state records show that 100 percent of the money it spent ($11,368.09) went to administrative expenses, according to 2008-2009 charity records from Florida's Department of Agriculture's Division of Consumer Affairs.

The founder and director of Brothers To The Rescue, Jose Basulto, explained the expenses this way: "We have a small warehouse in one rental place where we keep our records," Basulto told the I-Team. "That's about $300 or $400 a month, and the hangar (for the remaining airplane) used to be about $260 a month, and we've been running on peanuts for a long time."

Digging through IRS and the Florida Agriculture Division of Consumer Affairs records for the fiscal year 2008-2009, the I-Team discovered 205 different charities in South Florida alone that spend a least 75 percent or more of the money they raise, not on programs or the charity named, but on overhead -- defined by experts and state consumer affairs officials as "administration" and "fundraising."

The charities run the gamut.

From the Habitat for Humanity Chapter in the Upper Keys where state records show 100% percent of the $106,977.08 funds the charity spent went to "administration." 

Upper Keys chapter officials gave the I-Team IRS forms from 2006 showing the chapter spent 98.75 percent on administration and the rest, $462, on fundraising.

The forms also show they hold a little more than $1 million worth of mortgages for homes Habitat has built for the poor, which they use to help build additional housing.

To the famous Phil Petersen's Key West poker run where state records show 100 percent of the $86,229 they raised in 2007 went to raising more funds. The organizer of the poker run, Drew Peterson, says that figure includes half the money raised that the charity sends to two other charities.

To a charity operating out of an Oakland Park home called Rescued Pets are Wonderful. Last year records filed with Florida Department of Agriculture show "Rescued Pets" took in $14,200 dollars in donations, and spent $18,668 in what state records classify as administrative expenses, the second year in a row state records classified 100% of "Rescued Pets'" expenses spent as "administrative."

On December 11th, Rescued Pets filed a new form with the IRS claiming all $15,313 went to programs. However, $2,058 went to office supplies, a post office box, telephone bills and internet web hosting. Reached by telephone, Rescued Pets are Wonderful's director John O'Connor said $13,255 went to pay veterinarian bills, spay and neutering and pet food, leashes and collars.

Daniella Levine with Miami's Human Resources Coalition said those who give to charity should look closer at any charity that spends more than 30 percent on anything except programming.

"No organization should be 100 percent administrative cost. 'Administrative'  is what you use to provide the infrastructure for your services," Levine said.

Levine should know. Not only is she a lawyer and expert in non-profit laws and rules, she and the organization she founded, Miami's Human Resources Coalition actually trains and advises other charities how to efficiently operate and allocate their resources.

CBS 4 I-Team investigator Stephen Stock asked Ms. Levine. "If you are 50 percent or more on the dollar on other things other than programming, should you, the consumer, the giver, be worried?" "Absolutely," Levine replied. "And also nonprofits should have independent financial audits."

Harve Mogul, President and CEO of The United Way of Miami-Dade agrees. Mogul says good, efficient charitable giving is up to the giver, not just the charity.

"You [the giver] ought to do some homework," Mogul said. "Go on-line and look at the annual report. Call a volunteer [who works for the charity in question]. Visiting a place [the charity] is really a great way to take a look at what they're [the charity] doing."

Mogul said by doing your homework, you can better make up your own mind about whether to give money to that particular cause.

A good example of a charity that might need closer scrutiny is the Cross Road Food Bank in Fort Lauderdale. Not because of questionable spending but because a visit to its headquarters shows it is clearly a charity in need. The CBS4 I-Team visited after seeing that Cross Road Food Bank reported spending 100 percent of its donated funds in 2006 on administration. But when the I-Team got to the charity's location in Fort Lauderdale, the I-Team found a charity that gives tons of food every year to the needy.

The Food Bank's director says the needy is a group whose numbers are growing these days, even as the food bank, like many other charities in our area, have seen the number and amount of donations go down along with the economy.

That's why Harve Mogul said that you, as a giver, need to be especially aware of how your donated funds are used these days.

"You need to be thoughtful and not to simply react because it gets your heart," Mogul said. "It's got to be more than that. Money is limited, especially these days. So, to be just moved by emotion is not smart giving," Mogul cautioned. "You've got to use your head, too."

"There is so much need in society and the dollars available for donation are shrinking," Daniella Levine added.

"We [givers] can't afford to be wasting our money on things that are not truly having an impact," Levine said. "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."

The experts in charitable giving say a truly efficient charity spends between 10 and 30 percent on overhead (administration and/or fundraising.) But the CBS4 I-Team investigation found only 54 percent, or 1,273 charities, about half of the 2,355 charities based in South Florida, meet that standard.

Of the charities based somewhere in Florida, the breakdown on the number of charities spending 70 percent or more on programs, are about the same. Statewide,54.4 percent, or 7,557 charities, again about half of the 13,898 charities based in Florida, meet the standard.

To see for yourself, the CBS4 I-Team has established a special search engine where you can check out the state records on any charity operating in Florida, even if they are based somewhere else in the United States.

There you can find updated information on nearly 20,000 different records. Click here to go to the search engine.

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