Fraudulent Foundations

by AJ on November 14, 2016 - 8:47pm

         People donate money to different medical foundations in hopes to raise awareness and further research. Many people do this to help ill patients, in memory of someone who they have known that passed from the sickness or to do what they think is a kind act of good heartedness. In recent years, some foundations have been found to be fraudulent. This means that they are advertising for people to donate money to their fictional foundation. Then when donations are made, the money is not going to a foundation but into the con artists’ pockets. Rebecca R. Ruiz the author of “4 Cancer Charities Are Accused of Fraud” states that, “In its complaint, the F.T.C. [Federal Trade Commission} called all four of the cancer groups “sham charities,” charging the organizations with deceiving donors and misusing millions of dollars in donations, including putting money toward personal expenses like carwashes and college tuition, from 2008 to 2012.”  Another article, “Cancer Charities Called $187 Million ‘Sham’” by Cameron McWhirter writes that, “A group of family members whose charities claimed to be raising millions of dollars for cancer victims bilked donors to the tune of $187 million over five years, spending some of that money on fancy cars and trips for themselves and their friends, according to a civil suit.” Lastly, Tom Parfitt the author of, “Outrage as charity bosses pocket six-figure salaries from generous public donations” shares that, “Nine executives at Cancer Research UK earn more than the Prime Minister, including chief executive Harpal Kumar, who pockets up to £240,000 a year.” These three authors are proving to many people that there are fraudulent cancer foundations around the world. These people are posing to help cancer breakthroughs and patients but are taking money from generous people to fund themselves.

            There are many ‘foundations’ that have been found to be fraudulent, a few of them are: Cancer Fund of America, Children’s Cancer Fund of America, Breast Cancer Society, and Cancer Support Services.  While there are most likely many more fraudulent ‘foundations’ around the world, it is important to be cautious while donating to any foundations. Ruiz, states, “Two of the charities, the Children’s Cancer Fund of America and the Breast Cancer Society, agreed to settle the charges before the complaint was filed on Monday, according to the F.T.C. Those organizations will be dissolved. Litigation will proceed against the two other charities and Mr. Reynolds. His son, who is also named in the complaint, agreed to settle charges and will be banned from fund-raising, charity management and oversight of charitable assets.” These men are being held responsible for their actions, thousands of people were deceived by the actions of these men. Some of the money donated was recovered and some of it has been lost to these corrupt foundations. Furthermore, in another article about fraudulent ‘foundations’ the writer McWhirter, says that, “The alleged fraud, which would be one of the largest-ever involving a charity, was detailed in a complaint filed by the Federal Trade Commission, all 50 states and the District of Columbia.”         

             While many of these fraudulent foundations are being discovered, there are still many fraudulent foundations across the globe. For example, an article by Parfitt states that, “Cooke, a poppy seller, was inundated with requests from charities she felt were "taking advantage" of her generosity. The mother-of-three was struggling with her finances after being diagnosed with cancer. A spokesman for the NSPCC said: "We have thousands of long-term supporters, who are committed to helping end child abuse, of which Olive Cooke was one.”” While there have been many fraudulent foundations that have been uncovered over the last few years, it is possible that there are many more foundations that are ran by people who are pocketing the money instead of using the money to help ill patients.

            These fraudulent foundations are being uncovered over time, which is great for accountable foundations that raise money for a good cause. This also raises the issue that people may become hesitant and skeptical about donating money to different foundations because for the fact that some foundations can be fraudulent.

 

Citations

McWhirter, C., (2015). Cancer Charities Called $187 Million ‘Sham’. The Wall Street Journal.

Retrieved from http://www.wsj.com/articles/four-cancer-charities-accused-of-fraud-1432063345

Parfitt, T., (2015). Outrage as charity bosses pocket six-figure salaries from generous public

donations. Express. Retrieved from http://www.express.co.uk/news/uk/582911/charity salaries-donations-Cancer-Research-NSPCC-Amnesty-Olive-Cooke

Ruiz, R., (2015). 4 Cancer Charities Are Accused of Fraud. The New York Times. Retrieved

from http://www.nytimes.com/2015/05/20/business/4-cancer-charities-accused-in-ftc-fraud-case.html

 

Comments

Hi, AJ

Your analysis of fraudulent foundation was very compelling for myself as an unknowledgeable reader about the topic and its subject matter. I felt very engaged when reading your article because your writing style of this piece kept me wanting to read more, creating a captivating layout of the information you concentrated on for your topic. I also enjoy how you connected reader’s possible personal connections to situations which they may have face either directly or indirectly. Bringing in real examples from the past spotlighted how big of an effect this fraudulency impacts so many incent people and their loved ones. The one aspect of your article I would suggest to improve for future reference in conducting a writing piece would simply be creating a more intriguing title to draw in more readers to your post. I was drawn to your article because I did not know what fraudulent foundations entitled or encompassed but I feel having a more attractive title will present your great article to more surfaces of people’s interest.

I’m curious to know how publicly classifying these fraudulent foundations effects policy creation or adjust in the process of gaining a foundation permit or approval?

I have shamefully developed a miss trust amongst some charitable organizations and other donation events. It is truly a disgrace how society especially these fraudulent foundations have created this distrust and potency. Do you feel there are other effective way to regain this trust or filter out these foundations? I’m interested to research more on how individual countries collaborate on a global and local scale around the world!

Once again AJ, great job your discussion was very compelling and stimulated me to think a lot about this issue and how I’ve been effected.

Cheers!

Jeremy

Hi AJ, prior to reading this post I actually had no idea that this type of activity was going on, and it really made me feel uneasy. This type of fraud is unethical on so many levels, and it is shocking to know that just in this small blog, you identified four fraudulent charities. The idea that people are stealing money that was given to benefit sick and ill families is utterly disgusting. Your post offered great insight, and I think is relatable to a lot of people. It made me realize that a bit of research prior to donating is essential. Your analysis, and description of the chosen articles is straightforward, and engaging. Can you possibly think of a solution that could help lower the amount of fraudulent charities? Do you thinking that a universal standard should be created, or would increased transparency possibly be a solution?

Overall, this post was very well written and was full of valuable information. After reading this post I have certainly become a little skeptical about charities. This fraudulent action is unacceptable, and I am sure that I will do my homework before donating in the future.

Hi AJ,

What an interesting yet very sad and honest topic. I was compelled to read your post as I feel everybody has likely been affected by a fraudulent foundation at some point their life. I've always been curious about how many foundations are receiving donations to their own pockets, versus the cause they are "raising" money for. I think it's really important for people to do their research before donating. Although it is so hard to do this now a days as there seems to always been somebody raising money everywhere you go. This makes me wonder how many of us have donated to fraudulent foundations without even knowing! You did an excellent job of explaining how this happens and how often it does. I really enjoyed you listing a few foundations who were found to be fraud. I was surprised to see the Breast Cancer Society. I always had thought that was a reputable foundation. This just shows how little we all know and how easy it is for "foundations" to get away with this.

What I'm interested in knowing, is if well known foundations are always truthful with where their donations are going. Is it possible that other foundations are using some of their donations truthfully but also using their donations for themselves? This would be something interesting to consider in future posts! Another question I'd be curious to know, is how/where do these fraudulent foundations "get you"? Is it outside grocery stores? Online?

I enjoyed reading your post and understanding that some foundations may be fraudulent and that you should always be aware of who you're donating to!

Thanks for your post!

Hey AJ,

Your post caught my eye because I've learned a bit about fraudulant foundations in other courses I am currently enrolled in. It is so disappointing to hear how foundations are exploiting their practices. In society, many consumers want to make a difference and with busy lives a simple way to do this is to donate a little bit of money once in a while to a good cause. It is hard to accept that with so many people and their families impacted by cancer that there are companies that use this to their advantage for their own profit gain. It is unfortunate also to accept that cancer charities are not the only people practicing these unjust practices.

Recent attention to climate change has led to the production and sale of fair trade items in which small scale producers obtain a fair price for the food they grow. Fair trade groups also highlight the sustainable production of their products and the equality that producers experience. However, it has become evident that not all food that is advertised as fair trade can actually be considered fair trade. This is evident at Starbucks, where they raise the prices of coffee labeled fair trade. But it is not actually fair trade or fully qualified under fair trade guidelines. In fact only 8% of Starbucks fair trade purchases in 2013 actually followed legitiment fair trade guidelines.

It is unfortunate that we have so many fraudulant companies that promote they are bettering lives. It is a lesson to pay attention to detail and to do your research before donating to charity or before purchasing products that promise to be fair trade. Nonetheless, I really enjoyed reading your post- it was very informative and I will definitely be doing research before donating to any charity in the future.

Here is an article that goes into detail of the fair trade issue, if you are interested, https://www.theguardian.com/environment/green-living-blog/2011/feb/28/co... and this article goes into detail the unethical fair trade that starbucks promotes http://www.binghamtonhomepage.com/news/a-starbucks-boycott-percolates-ov...

Hi there,
This is a really interesting post, I had no idea that some of the organizations you mentioned were fraudulent and I was really surprised about some of them because they are fairly large, widely-known organizations! It is really unsettling that so many people donate to these organizations out of the goodness of their hearts only for that money not to go to its intended use.

I study environmental issues and your post made me think of an issue in the environmental world with carbon offsetting. Carbon offsets are basically a way for individuals or companies who emit a lot of carbon to counteract or cancel out the negative effects of their emissions by contributing to a project that would theoretically take this carbon out of the air. For example, say you took a flight somewhere and you wanted to offset the emissions from this flight, you could buy some carbon offsets from a program that plants trees, ad would thus take that carbon out of the air, making your actions carbon neutral. Unfortunately, in one of my classes I learned that there are a lot of ineffective or fraudulent carbon offsetting schemes just as there are with the Cancer foundations that you mentioned in your post. If you pay to have a stand of trees planted, for example, the trees may be planted for a short while before the land is taken over for other purposes, which does not actually remove your carbon from the air. I think it is awful that people are trying to do the right thing by donating to charities or trying to reduce their environmental impact, and companies or organizations are taking advantage of this and not being honest in where their proceeds are actually going.

Hi AJ,

The topic you have chosen was very interesting and I enjoyed reading every bit of it. Understanding the issue, it is very sad to see things like this occurring because the whole premise around this is to aid people who dealing with life threatening illnesses that cannot afford and need assistance from generous people. Likewise, the whole idea of fraudulent foundations is disgusting and how people have the urge to engage in such actions. You had a really good point on why people should think twice before donating. A question I have for you is that what would you do about this issue? Some suggestions I have would be having a verified charity requirement that is linked to other organizations to ensure that charities do not commit any fraudulence.

Overall, it was a well written response and really spreads awareness to this issue because it continues to occur throughout the world and surely needs to stop in order to see positive change.

Hey AJ, despite the heavy topic, i really enjoyed reading your post. Your writing was very clear and easy to follow. Your argument was well laid out, starting with the draw in where you got people interested and concerned with the topic, followed by well laid out anecdotal and factual evidence. This is a sad topic and it is truly disappointing the learn some big names in charity could be fraudulent but you handled the topic very well and mad your post a truly interesting and captivating read.

The true difficulty is knowing which charities you can trust and for some even knowing where to begin looking for the information can be a challenge. I am not sure if it the same everywhere but in Canada trusted magazines and newspapers such as Maclean's and the Globe and Mail tend to do charity rankings, where they rate rate charities and rank either the best or worst charities. Listed below are a couple examples. It is sad to know that there is need for this and that there is such a thing a fraudulent charities. There is some hope knowing that there are trusted sources we can turn to that try hold there charities accountable as well as make it easier to get in touch with organizations that are true to their word and their commitment to bettering the world.

Canada's Top 100 Non-profit Organizations:http://www.theglobeandmail.com/report-on-business/rob-magazine/top-100-n...
The worst 50 charities in America: http://www.macleans.ca/general/and-the-50-worst-charities-in-america-are/