Charities Behaving Badly

[Nirvana]

Americans donate more money to charity than people in any other country. Un- fortunately, some of our $300 billion in annual donations goes to frauds and swindlers instead of aiding legitimate charity work.

Within hours of the January earthquake in Haiti, for instance, con artists already were posing as relief organizations to bilk donors through bogus e-mails and Web sites. The FBI has logged hundreds of complaints related to Haiti relief scams, and the feds have made a few arrests.

Fly-by-night Web sites that collect cash and disappear may be the most brazen examples of this kind of fraud. They're also relatively easy to avoid. A trickier problem is seemingly reputable charities that misuse donors' money in other, more subtle ways.

Name recognition is no guarantee that your donation will help those in need. The United Way is one of the best-known charities in the world, with a century of history and more than $4 billion in annual fundraising. Yet in 2004, the former chief executive of a United Way chapter in Washington pleaded guilty to stealing at least $1.6 million during his 27-year tenure. In one particularly galling episode, he reimbursed himself for more than $20,000 he had donated to his own charity. The eventual investigation revealed a lax bookkeeping culture and uncovered a pattern of corruption that included other United Way managers.


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