Yesterday, news spread about four cancer philanthropies that pocketed $187 million from donors and the resulting legal aftermath in play. The Federal Trade Commission called the situation one of the largest government actions against charity fraud.
The four groups named in the civil complaint are the Cancer Fund of America, Cancer Support Services, the Children’s Cancer Fund of America and the Breast Cancer Society. Operations from 2008 to 2012 were called a “sham” by the FTC.
Because these groups appeal to emotions, especially when they involve women and children, they can be a great way to take advantage of people who simply want to help.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
“I’m glad to see our government regulators are putting a stop to these four outfits that for too long have been misleading the public and wasting millions of our charitable dollars,” said Daniel Borochoff, founder of the independent watchdog group CharityWatch, according to the Washington Post. “This is a significant action, but it’s the tip of the iceberg. There are a lot of other problems like this out there. I hope they continue to go after some of these questionable operators.”
So, should donors trust charities that on the surface seem completely legitimate?
For many charities, there would be no reason to think the money was going anywhere beyond the cause. But it turns out a large portion of people don’t trust charities for a variety of reasons.
A report released in October, 2014 by thinktank New Philanthropy Capital (NPC) and Ipsos Mori found that 35% of people have low levels of trust in charities, while 37% have a medium trust and 24% are very positive about the sector. This report took a look at people in the UK, but it’s reasonable to believe it mimics what would be true in the United States.
A lot of the information lends to the fact that many people are not educated enough about charities in the first place or believe the size of an organization and government affiliation play a role in credibility.
Here are some of the key findings:
- more than 1 in 3 people have doubts about charities, however the most common score is 7/10
- there is no one mental image of charities: the vast majority of people (67%) think mostly about large organizations when they think of charities (vs 25% who think of small organizations)
- people are less trusting if they mostly see charities as international (27%) versus those who see charities as being national or local organisations (21%). The most mistrusting people are those who think charities get their funding from Government and business (55% give charities a low trust rating) and those who think they are political (47%)
- there is no one public view of charities: based on the data we have segmented the population into informed enthusiasts (35% of the population), uninformed enthusiasts (26%), uninformed detractors (20%) and informed detractors (15%)
- the more people know charities, the more they tend to trust them: 69% of people who say they know ‘a great deal’ or ‘a fair amount’ about charities have high or medium trust in them
- a substantial chunk of the public, 20%, say they know little or nothing about charities and have little trust in them.
“Our new polling should act as a wake-up call,” said Dan Corry, chief executive of NPC. “Public trust is likely influenced by recent high-profile controversies around pay and campaigning, and charities haven’t yet come up with a convincing response.”
Philanthropic donations should be considered a wonderful and worthwhile contribution, and news like this can taint the overall image of very reputable healthcare charities. But the most important thing for donors is to spend a good amount of time researching organizations before sending them money and not to be confused by similar, generic sounding fund names.
