Fake Charities: Enriching a Few, Hurting Millions of Causes’ Credibility

Jun 18, 2013

Imagine that a genetic predisposition runs in your family and you have lost several relatives to cancer. You know that you, too, may be at risk. And the havoc cancer has wrought in your family drives you to regularly donate money to the Cancer Fund of America, even though finances are tight.

With a name like Cancer Fund of America, it sounds like a legitimate charity, doesn’t it?
Then one day, a colleague sends you a link to a joint investigative report on America’s 50 Worst Charities by the Tampa Bay Times and CNN, and you find out that the Knoxville, TN-based Cancer Fund of America has raised $98 million over the past decade – but spent less than one percent of money that on actual aid to cancer victims.

The rest, 99.1%, went to costly direct marketing campaigns and fundraisers, but mostly to the charity’s executives.

As a donor, regardless of the amount, you should be absolutely livid. I would be. There’s something particularly galling about organizations that manipulate our altruistic intentions and emotions, and then give only a tiny fraction – if any – to their purported charitable “missions.”

While I haven’t donated to any of the nonprofits mentioned in the report’s list, I was still seething at how a small group of unethical people can dupe almost $1 billion from unsuspecting donors.

As a PR professional, it also concerns me that a small group of nonprofits can tarnish legitimate causes and nonprofits. This is in part because these groups adopt names and logos that are very similar to those of established charities. That, of course, is intentional.

If you’re a regular reader of this blog, you may have seen an October 2012 post, written by Kyrsten Cazas, about the pernicious effects that the “greenwashing” phenomenon (products marketed through false claims of environmental friendliness) has on the environmental protection movement as a whole.

That’s why, according to a survey last year, 93% of consumers say they’ve adopted more “green” behavior at home but are less willing to pay more for goods and services marketed as environmentally friendly – because they know many of them are greenwashed. That means legitimate green cause marketing efforts are losing out as well.

We’ve also devoted plenty of blog space to the commercialization of the breast-cancer awareness movement, which seems to have transformed into a money-hungry beast with a mind of its own.

Even with tougher regulations on nonprofits, we can’t entirely stamp out the plague of fake charities, as there will always be unscrupulous people ready to part us from our money any way they can.

So it’s up to you and I to do our homework and research the organizations that truly mean something to us before we donate, so we know what our dollars are being used for.

The world of charity and cause marketing will be all the better for it.

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