Thursday, June 13, 2013

Scam Alert: Rip-Off Artists Pose as Law Enforcement Charities

CNN recently teamed up with the Tampa Bay Times to compile a list of the 50 Worst Charities in America. The investigation revealed host of "non-profit" organizations that spent exorbitant sums on fundraising and salaries compared to the amounts actually spent on performing charitable work.  Many of the worst offenders have raked in millions, while spending less than 1% of their revenue on the cause for which they were founded.

After reviewing the list, I was surprised at how many of the scams involved charities that supposedly benefit law enforcement organizations.  By my count, about 20% of the most egregious rip-offs were perpetrated by groups with names like "The American Association of State Troopers", or "The United States Deputy Sheriff's Association".  The "Disabled Police Officer Counseling Center", for example, only spent 0.1% of their funds on counseling for disabled police.  If you donated $100 to help injured cops receive treatment, a whopping 10 cents of your donation actually went towards that cause.

The sheer scale of these scams is staggering.  A major source of the problem can be traced to the cozy relationship between the "charities" and the for-profit fundraising groups they employ.  Over the past decade, the "International Union of Police Associations, AFL-CIO" reaped $57.2 million in donations.  Of that $57.2 million, they paid out $41.4 to for-profit solicitors.  During that same period, they spent $286,000 directly on charitable aid.  In case you don't have a calculator handy, that's about a 145-to-1 ratio of fundraising-to-charitable activity.

Think twice before you donate to any pro-law enforcement group (or any unverified "charity", for that matter).  Even groups with official-sounding names and endorsements are often nothing more than fundraising machines.  Unfortunately, very few of those funds ever make their way to the people who need them most.  Do the research and demand to see financial disclosure statements before you sign that check.  Don't be fooled by any scammers claiming to represent law enforcement groups.