Regular visitors to this space know the New To Seattle world headquarters is no stranger to sketchy cancer charity telephone pitches. (See, among other posts, here, here and here.) But this was a first for me. Within just 20 minutes I received not one but two telephone calls from a fundraiser for the very same charity, which I had never heard of. It was an outfit called Breast Cancer Survivors Foundation, based in Aventura, Fla., a suburb of Miami.
The experience was the same both times. The caller, who went by the name Lisa Kent, had trouble understanding my rather simple questions and was a little off in some of her answers, as though she had a hearing or cognitive issue. She soon hung up.
Not a good way for Kent to establish personal rapport. But that would have been hard in any event, because Kent was not a person but rather a voice-responsive computer. She/it probably was controlled by a human “supervisor” listening in and hitting buttons to provide answers.
I proceeded to look up the financial filings of BCSF, which says its main mission is to provide mammograms for women who can’t afford them. As I read the latest annual filings, paid telemarketers kept for themselves 92% of money raised from calls like the two I got. Only 5% of the cash was spent on mammograms.
BCSF, which has only been around since 2010, seems to have problems keeping its story straight. Its website says it funded 6,000 mammograms from its beginning to 2013, the year covered by its latest tax filing. But that latest filing–made under oath–says that over that same period, just 2,400 women received mammograms.
From 2010 to 2013, BCSF reported raising a total of $10.7 million in gifts, including donated mammogram services. Using the lower number of mammograms in the tax return, by simple math that implies $4,458 of fundraising per mammogram. The last time I checked, a mammogram without insurance could be had for an average price of $100. I’m sure BCSF donors will be happy to learn their largesse is in effect supporting a 4,358% mark-up. No bulk discount here, apparently.
It’s amazing how fast BCSF drank the paid fundraiser Kool-Aid.
On June 15, 2010, just as they were launching operations, the charity’s organizers filed their Form 1023 application with the Internal Revenue Service for tax-exempt status. (All the IRS documents mentioned can be downloaded from here.) The submitted projected budget for the rest of the year estimated that $150,000 would be raised, with a fundraising expense of just $10,000. That meant that less than 7% of the gifts raised would be spent in raising them. By 2012, the filing said, BCSF hoped to receive $500,000 in gifts with only $20,000 in fundraising expense–only 4% of gifts raised.
The budget with its low fundraising expense clearly was improbable on its face. But it apparently looked good to the IRS, which is often clueless when it comes to charities. The agency granted the tax-exempt status barely six weeks later, on July 30.
Guess what the BCSF’s eventual IRS tax filing for 2010 showed? Gifts received of $531,000–and fundraising costs of $479,000. Instead of 7% in fundraising expense, 90%. All the fundraising fees were paid to a single paid marketer.
And the IRS tax return for 2012? Gifts received of $3.1 million–and fundraising costs of $2.4 million. Instead of 4%, 77%. Again, a single telemarketer, Outreach Calling of Reno, Nev., kept most of the take. (Outreach Calling, by the way, was the “employer” of Lisa Kent, who called me.)
There’s no evidence the IRS routinely checks charities to see if projections filed under oath prove to be accurate.
For 2013, the latest IRS return, BCSF reported $3.6 million in cash gifts, plus donated mammogram services valued at $1 million. Of the $3.6 million, $3.3 million went to Outreach Calling and several smaller fundraising groups, leaving only $300,000–8%–for everything else.
Of the $3.6 million raised in cash, a grand total of $197,000 was handed out in grants, mainly to mammogram facilities. That’s the 5% I mentioned earlier. The $1 million listed as donated mammograms were by definition spent on mammograms, although it’s anyone’s guess how many were administered, and at what cost.
The combination of the $197,000 in cash grants made and the stated $1 million in donated mammogram services added up (rounded) to $1.2 million. That helped allow BCSF under accounting rules to claim a charitable commitment–the percentage of total expenses spent in direct furtherance of the charitable mission–of 27%, rather than my calculation of 5%. Now, even 27%–the figure listed, for example, by the Washington State Secretary of State’s Office–is a truly awful charitable commitment ratio. Charity watchdogs like the Better Business Bureau Wise Giving Alliance–which has not yet evaluated BCSF–say 65% is the minimum that is acceptable.
It is standard operating procedure for charities on their websites to post or link to their IRS filings, which by law are public record. I couldn’t find any such references on the BCSF website. I think it is fair to suggest that BCSF’s business model is based on the expectation that most would-be donors won’t check its financial efficiencies, or ask about them.
I sent an email to BCSF describing the calls to me and inviting comment on my calculation that 92% of the cash raised went to the paid fundraiser and only 5% to mammograms, numbers that I called “dreadful.” A response from a representative, Dee Dee Lowland, apologized for the duplicate calls, which she called an “isolated computer glitch.” She said I would be put on a do-not-call list, which I didn’t request–hey, I have to get my leads from somewhere–but probably is a smart move for BCSF.
Lowland declined to address directly the financial efficiency I specifically asked about, but said BCSF now has provided upwards of 11,000 mammograms. “We are, hopefully, in the business of saving lives,” she wrote. “We are proud of the work we do.”
It turns out that I am not the first to raise questions publicly about BCSF. To see a withering 2012 TV news report from my native state of New Jersey, where BCSF was based originally, click here.
And I probably won’t be the last. Especially if Lisa Kent keeps calling. And calling.
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I have just received a call from this charity and I was very skeptical. I started to hear the delay in her responses and I knew I had to start asking questions. I asked her what her name was and she said Lisa Kent. To my surprise she stayed on the call and I told her that we couldn’t make the donation. She said (after this long delay) that there was a cheaper option for ME. I said no thank you and have a nice day, like I always do. After this I looked up her name and found some things about her many many calls after. I was just about to call back again and interrogate her when I thought…..I better not. This just tells you how horrible some people can be with peoples generosity. I hope everyone sees this so they know….DO NOT DONATE TO THIS ORGANIZATION. IT IS A PHONEY.
Florida is a hotbed for charities like this.
Lisa Kent’s conversational responses may be “controlled” by a human supervisor, but her range of prerecorded responses appears to be very limited. She called me twice this week (in San Francisco). Both times I asked her what day it was. The first time she laughed and said, “Why do you want to know that?” The second time she remained silent and then hung up on me. Here’s a simple Turing test, folks: an actual person knows what day it is.
“Why do you want to know that?” is a common response. I hear it all the time.
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William, Thank you for another interesting report – I first found you when I got a call from a like charity. – using the term loosely !!
I can’t believe that the IRS doesn’t have a bell that goes off – whatever the limit is set.
Comparing a dodgy charity’s Form 1023 application for tax-exempt status with its first few annual Form 990 tax returns is usually interesting. Almost invariably, the charity says it won’t spend much on fundraising, and, almost invariably, it does. I’ve seen no indication that the IRS circles back after granting tax-exempt status to ask for an explanation.
Thanks. But believe it or not, I’ve seen worse.
Outrageous, even by the standards of squirrelly charities. Great work, as always, Bill.