AN INTOLERABLE FRAUD (NY TIMES)

February 8, 2008
An envelope arrived in our office the other day. It had the bulky, tawdry look of junk mail: pink and lavender Easter eggs, a plastic address window and a photo of a young man in fatigue shorts using crutches to stand on his only leg. “Thousands of severely wounded troops are suffering,” it read. “Will you help this Easter"

It was a plea for money from the Coalition to Salute America’s Heroes, one of the worst private charities — but hardly the only — that have been shamefully milking easy cash from the suffering and heartache caused by the wars in Afghanistan and Iraq.

The coalition and its sister organization, Help Hospitalized Veterans, were among a dozen military-related charities given a grade of F in a study last December by the American Institute of Philanthropy, a nonprofit watchdog group. These and other charities have collected hundreds of millions of dollars from kind-hearted Americans and squandered an unconscionable amount of it on overhead and expenses — 70 percent or 80 percent, or more. The usual administrative outlay for a reputable charity is about 30 percent. Money that donors surely assumed was going to ease the pain and speed the healing of injured soldiers went instead to junk-mail barrages, inflated executive salaries and other forms of corporate-style bloat.

It’s all legal. There is very little regulation in the charity game, and if someone like Roger Chapin, the “nonprofit entrepreneur” who founded the Coalition to Salute America’s Heroes and Help Hospitalized Veterans, wants to mismanage your money, he has great leeway in doing so. His veterans’ charities raised more than $168 million from 2004 to 2006, but spent only a pittance — about 25 percent — to help veterans. The rest, nearly $125 million, went to fund-raising, administrative expenses, fat salaries and perks. Mr. Chapin gave himself and his wife $1.5 million in salary, bonuses and pension contributions over those three years, including more than $560,000 in 2006. The charities also reimbursed the Chapins more than $340,000 for meals, hotels, entertainment and other expenses, and paid for a $440,000 condominium and a $17,000 golf-club membership.

And what did the soldiers get? Try almost $18.8 million in “charitable” phone cards sent to troops overseas in 2006 — not to let them call their families, but rather to call up a stateside business that sells sports scores.

Representative Henry Waxman, Democrat of California, whose Committee on Oversight and Government Reform has held hearings on the issue and documented the above abuses, has rightly called the conduct of charities like Mr. Chapin’s “an intolerable fraud.”

Mr. Waxman deserves credit for exposing it, but Congress should follow through with stricter oversight and disclosure rules so Americans don’t have to rely on House committee hearings to know where their money is being misspent.

Meanwhile, if you happen to get a mailing from the Coalition to Salute America’s Heroes, by all means open it. Look the contents over — the glossy bunny greeting card, the earnest letter from the retired Brig. Gen. Chip Diehl — then shred or recycle it or both. And think of what Mr. Chapin told the House committee when asked what would happen if his charities ever told donors where their money went.

“If we disclose, which I’m more than happy to do,” he said, “we’d all be out of business. Nobody would donate. It would dry up.”