Charities to watch out for this holiday season...
Government says four cancer charities are shams
Tue May 19, 2015 | Washington (CNN) - Government says donors gave $187 million over four years to support luxury lifestyles, private fundraisers; Donated funds used for luxury cruises, trips to Las Vegas, shopping; FTC and 50 state regulators say charities committed nationwide fraud
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Critics raising questions over breast cancer charity's fundraising, spending tactics
November 7, 2013 - A charity in The Woodlands has raised millions in the name of breast cancer, but critics are questioning where donations are going
Government says four cancer charities are shams
Tue May 19, 2015 | Washington (CNN) - Government says donors gave $187 million over four years to support luxury lifestyles, private fundraisers; Donated funds used for luxury cruises, trips to Las Vegas, shopping; FTC and 50 state regulators say charities committed nationwide fraud
In a rare joint action with attorneys general for each of the 50 states, the Federal Trade Commission says four cancer charities run by extended members of the same family conned donors out of $187 million from 2008 through 2012 and spent almost nothing to help actual cancer patients. Each of the charities charged were the subject of extensive reporting by CNN in 2013. And in each instance, none of the four charities would comment. We were ordered out of the building at the Cancer Fund of America in Knoxville, Tennessee, and were the object of an obscene gesture by the CEO of The Breast Cancer Society in Mesa, Arizona.
The Cancer Fund of America is run by James Reynolds Sr. His son James Reynolds Jr. is the CEO of the Breast Cancer Society. Another charity, the Children's Cancer Fund of America, is run by Rose Perkins, the ex-wife of the elder James Reynolds. He's also the CEO of the fourth charity, Cancer Support Services. The government says the charities claimed to provide direct support for cancer patients, breast cancer patients and children with cancer. "These were lies," the government's complaint says.
Jessica Rich, chief of the FTC's Bureau of Consumer Protection, says that in all, the charities spent about 97% of donations they received either on private fundraisers or on themselves. Only 3%, she says, went to help actual cancer patients. According to the complaint, funds donated to help cancer patients instead went for personal use, in often lavish ways. "[D]onated funds were used to pay for vehicles, personal consumer goods, college tuition, gym memberships, Jet Ski outings, dating website subscriptions, luxury cruises, and tickets to concerts and professional sporting events," the complaint says. "Most of what we are doing is bringing actions against fraud," says Rich. "And this is as about as bad as it can get: taking money away from cancer victims."
There was also what the FTC calls "rampant nepotism" at play in all of the charities. For instance, at the Breast Cancer Society, James Reynolds Jr. hired his wife, Kristina Hixson, to be his public relations manager. The complaint states that he also hired Hixson's two sisters, her son by a previous marriage, her mother and her step-nephew. According to the complaint, Hixson's mother had been a caterer. At the Breast Cancer Society, she was hired to write grant applications. Moreover,on their tax returns, each charity claimed millions of dollars in donated goods shipped to overseas locations on behalf of cancer patients. The complaint says the charities never owned any of the goods in question and simply paid a fee to a private firm in South Carolina to ship the goods, called gifts-in-kind. CNN went to Guatemala in early 2014 to investigate anyone who may have received those gifts and could find no evidence that they even existed.
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Critics raising questions over breast cancer charity's fundraising, spending tactics
November 7, 2013 - A charity in The Woodlands has raised millions in the name of breast cancer, but critics are questioning where donations are going
Breast Cancer Awareness Month ended last week, but the fight to help women battling the deadly disease continues year round. Whether or not you know someone touched by breast cancer, many make donations to the cause to show support. One of the groups asking for your money is based in The Woodlands and has raised millions. But as 13 Undercover found out, critics are raising questions about where the cash is actually going. We've tried for weeks to get those running the Breast Cancer Charities of America to sit down on camera to answer questions raised by charity watchdog groups about exactly how they spend your donations. But so far, we haven't had any luck.
The Breast Cancer Charities of America says it exists to eliminate breast cancer as a life-threatening disease. They claim to have a variety of programs, including research, education, advocacy and helping cancer sufferers overseas. But their main service is what they call the Help Now Fund. On YouTube, there's video of Erica Tullis, the charity's executive director in 2011, at a Los Angeles fundraiser for the group. "Our main service is called the Help Now Fund, and we pay for the rent and utilities for women going through breast cancer," she says in the video.
And there is also video of Tullis, just a few weeks ago, again promoting the Help Now Fund at a Conroe fundraiser for her charity. Erica says, "That is the primary program service that we have, is called the Help Now Fund. Where we go in and pay for those rent and utilities for women going through breast cancer." According to the group's publicly available IRS forms, it's received almost $45 million in public donations since it began in 2009. But its Help Now Fund has only handed out just over $187,403 to women to help pay their bills. That's less than 1 percent of the $45 million it's collected in donations. "I think it's horrendous," said Leah Napoliello with the Better Business Bureau.
The Better Business Bureau says it's unable to give the charity a grade because it has repeatedly refused to cooperate in a comprehensive review of its finances. "They say the Help Now Fund is a way to help people facing the disease, and then very little money is going to help the victims of breast cancer. So it's very misleading," Napoliello said. Get this: Of the more than 500 women who've gotten money from the Help Now Fund, the average received is just $348. And according to the charity's website, each woman who applies for financial assistance must meet specific criteria and is limited to a maximum of only $500. "That's just a drop in the bucket of the resources needed," said Ken Berger with Charity Navigator.
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