Beware of veterans’ charity scams and wasteful spending


There’s some bad news and some good news to report. First, the bad news: According to the Federal Trade Commission (FTC), there was a long list of veteran charity scams that operated under names that sounded legitimate but cheated good-hearted, generous people and the veterans that donors wanted to help. The number of scams identified was surprisingly high, at least to me.

The good news is that, last summer, the FTC announced that, in a nationwide crackdown, federal and state law enforcement agencies had taken more than 100 actions against such fraudulent “charities.”

The FTC did not provide a total of all the stolen donations involved in those cases, but one organization alone, called “Help the Vets,” defrauded donors of about $20 million between 2014 and 2017. One FTC official, Lois Greisman, was quoted as saying, “The harm here is enormous. Think of the legitimate charities deprived of money that could be put to good use.”

Greisman also noted that older Americans are a favorite target of phony charities because of the known generosity of seniors.

Just to give you an idea of what to watch out for, here are some organizations identified on the FTC website as having been sued for lying to donors:

• American Disabled Veterans Foundation

• National Vietnam Veterans Foundation

• Healing American Heroes Inc.

• Veterans Fighting Breast Cancer

• Military Families of America

• Foundation for American Veterans Inc.

• Healing Heroes Network

(See https://www.consumer.ftc.gov/articles/giving-charities-help-veterans.)

You can readily see the strategy: Use appealing words to describe veterans, such as “disabled,” “handicapped,” “heroes,” “American,” “helping” and “healing,” in the organization’s name to fool people.

Then, in written solicitations, use compelling pictures and narratives that appeal to the compassion and patriotism of target donors. Maybe include a token gift or some address labels to create a feeling of an obligation. Unfortunately, the scam strategy works all too often.

Then there’s a related problem with legitimate charities that do some good but have been criticized for excessive and irresponsible spending on themselves, at the expense of veterans that the donors wanted to help.

Perhaps the most surprising and disappointing example came to light in 2016, when CBS News and the New York Times reported that the Wounded Warrior Project (WWP) had spent millions of dollars on expensive travel, conventions, conferences and lavish events for employees. One watchdog, Charity Watch, reported that the WWP actually only spent about 54 percent of its budget on assistance programs for disabled veterans.

In a subsequent oversight investigation, the U.S. Senate Judiciary Committee criticized the WWP not only for its wasteful spending and misuse of donations, but also for inaccurately inflating its actual spending on veterans; misleading advertising and reports; and exaggerating the beneficial impact of some of its programs.

On a positive note, the new WWP leadership assured the Senate Committee in 2017 that corrective action had been taken to address the problems identified, eliminate wasteful spending of donations, and increase spending on their veteran care and support programs, in order to restore public trust. We’ll have to see if they keep that promise. The principle “trust but verify” should apply here.

As noted in the May 2017 Senate Committee report, the misconduct described is not confined to the WWP. Hopefully, the scandal and Senate investigation publicity will serve as an object lesson for other charities.

The negative reports about scams and wasteful spending are reason for caution but should not discourage donations. FTC officials emphasize that the majority of veterans’ charities do good and important work.

So, what should we do? Here are some tips from the FTC and other sources.

 

Do your research

 

• Search the charity’s name online, with words such as “complaints” and “scam.”

• Check out reports and ratings through trustworthy watchdog organizations, such as Charity Navigator, Charity Watch, Guide Star and the Better Business Bureau Wise Giving Alliance.

• If a tax deduction is an important consideration, use the IRS’s Tax-Exempt Organization listing to see if your donation will be deductible.

 

Ask questions

 

• What’s the charity’s website, address and mission?

• How much of your donation will go directly to help veterans (the programs you want to support) and how much for the organization’s expenses?

 

Be careful how you pay

 

• Phone and Internet scammers often ask you to send them cash, wire money or donate by gift card. Don’t do it!

• If you’re donating online, check that the charity’s webpage where you enter your payment information has “https” in the web address. That’s supposed to mean that your information is securely transmitted.

• Be especially cautious (I would say hesitant) about donating through social media and “crowdfunding” sites. Don’t assume that they’re legitimate, even when they are shared or “liked” by a friend. Do your own research. The FTC suggests that the safest way to donate through such sites is to donate to people you actually know who contact you about a specific charitable cause.

 

Help stop charity scams

 

Report scams to the FTC at www.FTC.gov/complaint and to your state charity regulator. In Delaware, contact the Delaware Department of Justice, Consumer Protection Division, at https://attorneygeneral.delaware.gov/fraud/cpu/complaint/. Provide as much information as you can, including the name of the organization and the fundraiser contact, phone numbers, website address and any details they gave you about the charity.

This warrants repeating, because it’s so important to keep in mind.

As noted in the FTC report, there are many legitimate charities that do a great job using donations to help our nation’s veterans with education, training, counseling and financial assistance. They also help with health care, employment, transportation and housing assistance. The need is great and dedicated organizations work hard to meet those needs. God bless them all for their efforts.

I don’t have a list of screened and recommended organizations and am reluctant to offer any suggestions. You have to be careful and do your own research before donating to any organization. Checking ratings and reports is fairly easy and it will give you confidence in making sound decisions.

Whatever charitable organizations you decide to support, thank you for continuing to help veterans and their families in their time of need. You’re saving and improving the lives of those who served us all.

 

By Jerry Hardiman

Special to the Coastal Point