In a continuing investigation of bad charities, a team of reporters looks at how such groups improve the appearance of their balance sheet by claiming they have sent millions of dollars’ worth of medical supplies to impoverished countries.
Some of the groups use a for-profit company to make the arrangements, for a fee: Charity Services International.
The investigation -- by the Tampa Bay Times, the Center for Investigative Reporting and CNN -- found little evidence that the company actually shipped what it claimed: $40 million worth of medical supplies to Guatemala in the year the team studied, 2010 (paywall alert).
Because neither the U.S. nor Guatemalan customs officers checked what was actually shipped, the reporters found it was impossible to say what was actually sent and what it was really worth. But in Guatemala, they could find no evidence that a major influx of medical supplies occurred.
The deal with the middleman company would enable the charities to use the claimed donations to offset the millions they actually paid professional fund-raising companies and in salaries to their own executives. This would help the charities pass muster if the IRS or some state agency were to investigate.
Five of the 15 charities that used the middleman company in the year studied were on the list of “America’s Worst Charities,” identified by the same reporting team last year. A Florida-based charity, Kids' Wish Network, was judged worst, in that it spent only 3 percent of its income on its mission, with the rest going to the fundraising organization.
The televised version of the report will appear on the CNN show Anderson Cooper’s AC360 at 8 p.m. Wednesday and Thursday.
