Less Than Hale and Hearty
It’s no secret among those in the know that Charity Navigator wouldn’t be here without Hale House. Hale House is the famed
Sadly, despite being taken over by the state at one point, the organization that spawned us has not done as well as we have. Here at Charity Navigator, we’ve known for a long time that Hale House was still in dire financial shape--operating at a chronic deficit and spending millions more than it has taken in each year, while wasting most of their funding on administrative and fundraising costs.
Recently, the New York Daily News reported in great detail about the group, pointing out that while they have made some good strides in some areas, the group is still struggling mightily. As my Charity Navigator colleague Sandra Miniutti points out in the story, "this is not a sustainable charity the way it is now - it's not financially healthy. Their spending is still out of line for what we see of the typical charity. They should have turned things around by now."
Ironically, while the group is trying very hard to deliver services, even expanding what they do (a relatively curious business decision, considering how bad they’ve struggled—most groups in trouble don’t decide they need to undergo a massive expansion), they’ve really had difficulty raising money without Lorraine Hale. As the Daily News points out, “as corrupt as Lorraine Hale was, she wrangled a record $8.4 million out of 250,000 unsuspecting donors in her last year, often by claiming in fund-raising letters that ‘her babies’ were running out of milk and diapers. Her big-name supporters included Rosie O'Donnell, Donald Trump, Rudy Giuliani and the Duchess of York, Sarah Ferguson. Now Hale House is down to 45,000 donors and its board room's star power peaks with Al Reynolds, the husband of TV personality Star Jones.”
Charity Navigator wouldn’t be here without Hale House. The question is, should Hale House still be here?
posted by Trent Stamp at 11:25 AM
1 Comments:
I just don't know... I arrived at this website while searching for info on Charity Navigator. I had never heard of this organization prior to today, but I became suspicious of them when a local charity here in Iowa trumpeted the fact that they had been awarded 4-Stars from what they claimed was "...America's premier independent charity evaluator...". My opinion about that local charity is that it should rate considerably less stars in ANY evaluation. So how could they get '4-stars' legitimately?
The 'warning' hairs on the back of my neck stood up even straighter when I started reading Charity Navigator's own web site. First, their site is page after page of meaningless fluff (or 'feel-good' pages) that follow the pattern of 'sham' charities. I wanted to know who they are; how they are funded; who is funding them; how they find 'charities' to evaluate, etc. A significant number of 'recommendation' type organizations actually exist only to dishonestly guide people to 'target' destinations owned by (or affiliated with) the supposedly neutral recommending organization.
Well, the canned story of how they got their start was easy to find. According to them, a New York multi-millionaire started Charity Navigator purportedly because he didn't want anybody else to get scammed like he did after his bad experience with his donations to Hale House. (The Hale House had passed to the daughter of the founder. The daughter subsequently began to slide money out the side-door to fund her personal expensive tastes).
Okay, I said to myself, so far so good. To achieve their stated 'founding' purpose, they would have to do some kind of evaluation that would detect if some of the donations were going to the Charity executives' own personal expensive tastes.
When I finally found their page that explained 'how' they evaluate other charities, I was shocked! They don't visit any of these charities that they rate. They don't look at where the money is actually going. They don't assess 'number-of-needy-people-helped per dollar-received'. And they put forth NO effort to determine if any donations are being improperly funneled out the side door. The only 'assessment' that Charity Navigator does is a look at the target charity's IRS form 990, which is filed yearly with the IRS by most charitable organizations. (It should go without saying that any charity that was being dishonest would surely not put that dishonesty on their IRS 990 form and submit it to the government!) Additionally, Charity Navigator does not assess the 'value-provided-to-the-needy' or any other thing that you or I would expect an assessment to include. There are only three things that Charity Navigator 'assesses' (from information gleaned solely from the target charity's IRS 990 form):
First, is the charity 'rich'. If your charity doesn't bring in at least a half a million dollars every year, it will never be recommended as an 'OK' charity by Charity Navigator.
Second, is your charity 'rolling in the dough'? If your charity has more money than it needs, it will get an A-1 rating from Charity Navigator. But if your charity overextends itself sometimes to help 'just a few more people' (i.e. actually being devoted to helping people, rather than being devoted to bank accounts), Charity Navigator will rate it poorly (no pun intended).
Third and last criterion: Is your charity's marketing department a winner? If your charity can show financial growth year after year, then Charity Navigator thinks you're swell. But if you run a charity where most of your people are actually down on the street and in the soup kitchens helping people -- don't expect any help or good rating from Charity Navigator. In other words, charities that have most of their people engaged in boiler-room telemarketing fund raising activities will get a better rating than charities that have most of their personnel actually (literally and physically) helping people. Jesus Christ and his Disciples would have been rated as "Do Not Donate To This Group" (even after adjusting for inflation). That realization was a real eye-opener for me.
On Charity Navigator's website they have a search box that you can use to search for any charity you are wondering about. Since Charity Navigator is itself a 501(c)(3) charitable organization, I put their name in the search box and clicked on the "GO" button. Guess what? Up pops a yellow-colored page with the haughty explanation (in bright red letters, no less!) saying, "We don't evaluate Charity Navigator." Their crafty explanation is that they formed THEIR charity as a 501(c)(3) 'Private Foundation' so they don't have to tell you anything about their finances-- and that's it. They are not going to tell you anything about where their funding comes from nor in whose bank account it gets deposited. Why doesn't that surprise me?
Charity Navigator's website declares boldly, "Find a charity you can trust". I would like to do just that. But with the way Charity Navigator is keeping everything about their own inner-workings 'close to the vest' I think I'll take a 'pass' on any of their recommendations.
Finally, a note about Mr. Stamp's comments here that,
"...most groups in trouble don't decide they need to undergo a massive expansion..." and
"...they've really had difficulty raising money..."
Apparently history and charity in history have no value here. History itself tells us of an ostensibly charitable group that started about two thousand years ago in a small Middle Eastern country. Most of the members of that group were in hiding and their miracle-working leader had just been executed by crucifixion. And what was their plan? To "… undergo massive expansion…" even though they had little or no money in hand. That group still survives today and has tens of thousands of 'offices' worldwide. And they are one of the largest bona-fide charitable organizations that have ever existed. An assessment of a charitable organization based solely on its bank account (or IRS form 990) is neither complete nor honest.
- Charity Navigator itself is secretive about its own money-in and money-out details
- Charity Navigator would have rated the nascent Christian community as not worthy of our charitable dollars, and
- Charity Navigator's current assessment procedure would not have caught the very type of 'fraud' for which it (Charity Navigator) was created to discover and uncover.
I think I'll take a 'pass' on any of their recommendations.
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