The telephone caller to the New To Seattle world headquarters said he was raising funds for the American Veterans Support Foundation. He described the cause as a fully tax-exempt charity headquartered from where he was calling in New Jersey. The caller pressed me to pledge a small sum, throwing out the figures $45 or $55.
I asked his name. “Jim,” he replied.
What’s the last name, I asked.
“Jim” promptly hung up.
I continue to use quotes here because “Jim” was a computer-controlled interactive voice, and not a human at all. Perhaps he didn’t want to admit he lacked a last name or a pulse.
Or maybe the artificial intelligence behind the computer sensed that the next questions would be even harder to answer.
For as I quickly learned after a little research, there is no charity officially named American Veterans Support Foundation–not in New Jersey (where I grew up) nor anywhere else. It’s instead a trade name used by a 22-year-old outfit called the National Vietnam Veterans Foundation.
Why do I call NVVF sketchy in the headline to this post? Besides the morphing name and the cranky computer, let me count the ways.
By its own financial and tax documents (which can be downloaded from here), NVVF spent barely a dime of every single dollar raised over the past six years on anything that reasonably could be called a charitable purpose. And that included a grant to a relative of the organization’s president. The rest of the donations pretty much were kept by paid telemarketers, one of which programmed “Jim” to chat me up.
As a would-be donor, would you want to know that very, very little of your gift to a charity with “veterans” in its name would help veterans?
Email addresses listed on the website didn’t work; my requests for comment bounced back. A call to a listed phone number was answered by a tape recording saying the mailbox was full and “please hang up,” which I did.
Even the location of the main headquarters seems elusive. “Jim” said he was at the national headquarters, which he placed in Eatontown, N.J., near where Hurricane Sandy smashed into the Jersey Coast two years ago. I don’t think so. Ten Internet phone directories contain no listing thereabouts. His caller ID suggested a phone number in the vicinity of Lexington Park, Md., in southern Maryland near the Chesapeake Bay. The NVVF website says Fort Lauderdale, Fla. Tax and regulatory filings say Alexandria, Va. with “an office of Special Projects” in Fort Lauderdale that “accepts telephone calls from the Foundation’s toll-free number.”
Not really. That’s where I called and was told to hang up.
So I can’t give you the NVVF side of things now. But we’re not talking about a tiny sum here. In the latest six calendar years for which I can find data, 2007 to 2012, NVVS raised a total of $24 million in donations. (Dollar amounts are rounded.) Of that sum, $21 million was spent in fundraising, virtually all of it going to outside paid fundraisers. That probably ranks NVVF among the nation’s 20 largest charitable employers of outside paid fundraisers. NVVF’s outside fundraisers kept about 88% of what they brought in.
Including some other items, NVVF’s fundraising efficiency ratio (the percentage of funds remaining after the cost of raising them) was just 13%. Charity watchdog groups like the Better Business Bureau Wise Giving Alliance say anything below 65% is way out of line.
Of the $24 million, a mere $240,000 was handed out in direct cash aid to individuals and organizations. That’s all of 1%. Another $2.5 million was spent in what was described as various veteran support programs, including “awareness” publicity and a hotline. By my calculation, the charitable commitment ratio–percent of total expenses spent in direct furtherance of the charitable mission–was only 11%. Again, the charity watchdogs look askance at anything under 65%.
The BBB, by the way, says in a written notice the NVVF declined to cooperate in a review of the organization for good-governance compliance. This is a screaming red flag to donors. So are the no-star rating from Charity Navigator and NVVF’s inclusion in an official list issued last month of “Oregon’s 20 worst charities.”
I’m guessing–and it’s only a guess–that the fair amount of negative NVVF write-ups easily found on the Internet might be one reason why in the summer of 2011 it launched its new American Veterans Support Foundation brand. A lot less baggage comes up when that name is Googled. If that’s the reason, it has worked: Contributions for 2012, $4.9 million, were 22% higher than 2011’s $4 million.
But of that $4.9 million, $4.5 million was raised by three outside paid fundraisers, identified in NVVF filings as Midwest Publishing, Telecom Enterprises and Outreach Calling. They kept $4 million for themselves and remitted to NVVF a mere $500,000.
NVVF’s website and regulatory filings say the charity’s founder, chairman and president is J. Thomas Burch Jr. According to media reports, he’s a lawyer who is a long-time activist for veterans causes as well as favored conservative candidates like George W. Bush.
According to NVVF’s filings for 2012, Burch was paid $15,000 for what was described as a one-day-a-week job. But that wasn’t the only benefit going to his family. The filings say NVVF paid $9,300 of Burch’s medical, dental and life insurance expenses. An additional $11,128 in cash “emergency assistance” was given William H. Burch–identified as a brother. That sum was more than one-quarter of the entire sum handed out to individuals, which was only $40,750.
In poking through the public record on the original granting of NVVF’s tax-exempt status, I came across a letter signed by Tom Burch from the NVVF to the Internal Revenue Service dated May 29, 2001. It was in response to questions an IRS agent had asked about planned use of outside paid fundraisers.
“The use of such independent contractors would be restricted to a maximum compensation of 30% for the contractor with the Foundation retaining 70% of funds generated and collected by the contractor,” Burch declared. “The Foundation shall not pay more than 30% of funds received for the services of any independent contractor or non-employee hired or retained for any fundraising activity.”
That the promised 70/30 split of charity to fundraising soon became 12/88 requires no further comment here by me. But I invite anyone interested in this matter to chime in below. Even “Jim.”