Marketing Misery For Fun And Profit

By Mark Esposito, Guest Blogger

The real victims of charitable scams
The real victims of charitable scams

The flyer came in the mail the other day. Tucked between the Lowes ad and the light bill ( I love that anachronism for the electric bill) were photographs of three emaciated children of color living in obvious squalor in an undisclosed Third World hell hole. The bold caption read” A CHILD DIES EVERY 15 SECONDS FROM HUNGER,” and beneath it was a furtive plea for help, capping off with the comment that last year 3 million children died from hunger. You could check off your donation and pay with that status symbol of Western life, your Visa or MasterCard. Millions of  middle class selfish, egotistical, uncaring Americans do and hence the appeals keep pouring in.

It is undoubtedly true that some children suffer this sad fate and that the conditions described might exist somewhere, say, Somalia during the recent famine. These kids need help and every compassionate person on the planet would agree. But is this the whole truth? According to the BBC, the “One Child every 15 seconds …” stat is true but misleading. Sort of the marketing of misery to get an emotional response  just like the desired reaction when watching a dishwater detergent ad.

The implicit message of my postcard appeal is that millions of children are going to bed hungry every night and ultimately dying from starvation every year and that pennies a day will provide them salvation. The truth is that three  million children do die from poor nutrition but in most cases it is education that will save them not cash.

The three million number is an estimate from the respected British medical journal, The Lancet. The marketers of charity have reduced that number to the “One child dies every 15 seconds …” schtick, but the science says something very different. For example, according to Jane Howard of the U.N. World Food Programme,  a significant number of these children die from measles whose deleterious effects are exacerbated by poor nutrition and compromised immune systems. Also, the statistic is complicated by double counting. When a child dies from contaminated water, the figure goes under the nutrition stat and also the bad water stat. And the tragedy of it all is that providing that child more food would do nothing to ease his fate.

Most of the countries where kids die from malnutrition are not poor or war ravaged. In fact many like India and Nigeria are not considered poor at all and have plenty of resources to feed kids. The problem is the quality of the diet. For religious and cultural reasons, some women simply do not eat the variety of diet needed for proper prenatal nutrition which then carries over to their offspring. In turn, the kids eat the same diet the parents eat and, while getting plenty of calories that would satisfy the nutritional needs of adults, these kids do not achieve adequate nutritional needs for developing bodies. Thus, the problem is far more complicated (and thus less susceptible to a monied response) than my flyer explains and that’s just fine with Jack Lundie of the If Campaign, one of the charities pulling on your heart-strings for cash. “It may be true that … from our top line messaging you don’t get all the information about  the entire problem, but I don’t think it would be realistic to expect that to happen,”  he says. Well, how about putting some of that info somewhere on the appeal?  Nope, the flyer is too short.

You see it’s not about getting money, but according to Mr. Lundie,  it’s more about “establishing the right engagement to allow us to have a more meaningful conversation.”  Should I call or just email, Mr. Lundie?  And when asked if his appeal might lead people to believe that children are starving from lack of food, Mr. Lundie allows that “some members of the public could make that inference,” but counters that the If Campaign never uses the word “starving.” BEEP, BEEP, BEEP–B.S. Detector Alert!!

Well, maybe these charities have their heart in the right place even if they can’t quite get us the whole truth about the problems they combat. Seems that’s problematic, too. According to CNN, the charity business, and that’s what it is, is fraught with charlatans  just waiting to pocket your cash and throw pennies at the victims. One, The Kids Wish Network, that operates out of  a warehouse in Florida,  solicited millions in donations from hapless Americans over the past decade ostensibly  to pay for last wishes of dying kids. How much of that donated dollar made it to the kids? 3 cents!  Yep, three very small. The rest went to the charities founder, a cool $4.8 mil, and to corporate solicitation companies who took over $110 million.

Is that unusual? According to the Tampa Bay Times, not at all. In the investigative report, reporter Kendall Taggart noted that 6,000 charities have chosen to pay for-profit companies to raise their donations and some of them mimic the names of more well-known charity names to fool the public into giving.

CNN and the Tampa Times have named their 50 worst American charities and the findings about these groups are startling. Here they are verbatim:

“- The 50 worst charities in America devote less than 4% of donations raised to direct cash aid. Some charities gave even less. Over a decade, one diabetes charity raised nearly $14 million and gave about $10,000 to patients. Six spent no cash at all on their cause.

— Even as they plead for financial support, operators at many of the 50 worst charities have lied to donors about where their money goes, taken multiple salaries, secretly paid themselves consulting fees or arranged fund-raising contracts with friends. One cancer charity paid a company owned by the president’s son nearly $18 million over eight years to solicit funds. A medical charity paid its biggest research grant to its president’s own for-profit company.

— Some nonprofits are little more than fronts for fund-raising companies, which bankroll their startup costs, lock them into exclusive contracts at exorbitant rates and even drive the charities into debt. Florida-based Project Cure has raised more than $65 million since 1998, but every year has wound up owing its fundraiser more than what was raised. According to its latest financial filing, the nonprofit is $3 million in debt.

— To disguise the meager amount of money that reaches those in need, charities use accounting tricks and inflate the value of donated dollar-store cast-offs – snack cakes and air fresheners – that they give to dying cancer patients and homeless veterans.”

This is not to paint all charities as crooks or cads as some do fine work for less than 20 cents on the dollar for administrative and fundraising costs  like Child Fund, International, but the truth is that charity is big business. Thus it attracts the ethical bargain basement of people who see not kids in need, but only dollar signs among the prevailing misery.

For those people interested in how their charity is doing to promote the good or to those people trying to find to whom to donate, I suggest you explore , an organization that independently evaluates charities from a financial and efficiency standpoint.

~Mark Esposito, Guest Blogger

Sources: BBC; CNN; Tampa Bay Times;

29 thoughts on “Marketing Misery For Fun And Profit”

  1. Cameron

    I couldn’t agree more. One other thing is when a person makes the mistake of giving to one of these charity fundraisers often the floodgates open and the phone calls never stop. It is akin to feeding a stray dog.

  2. Excellent article on the charity industry Mr. Exposito and well said. There should be more and more information on just what a con most charities are but regrettably you will rarely find an article like this-if ever – in the main stream media.

    Most charities now are just big businesses and the executives of these businesses earn very high salaries. The public are duped into believing that 90% of the cash they give gets to the donors when this is generally far from the truth. The fact is that nearly every charity of note uses professional fund raisers to collect money for them and they really do not care one iota if, say, 80% or more of that cash goes to the professional fund raisers who are doing nothing more than running a profit making business for their own benefit.

    Every charity should be subject to independent audit and be required to declare to donors upfront, whether collecting directly or indirectly, just what percentage of the cash people are being asked to or do donate will go to the recipient. If charities cannot determine this and have this audited annually then they should be denied the right to operate. Moreover, miisleading or false declarations to the public about the amounts of money getting to the end recipients should be subject to prosecution. Of course this will not happen as most people would not give if they knew just how much of their cash was being skimmed off in so called admin expenses and by the professional fund raising businesses at the front end that most of the charities use to collect for them. If such legislation was mooted there would of course be an outcry from the operators running nearly all of these charity collection businesses and from the charities themselves. The last thing most of these people want is real and accurate transparency on just where most of the cash collected goes.

    Next time a charity (or rather, the fund raising business that they use to collect for them) asks you for your hard earned money ask them how much of the cash donation is gobbled up in the charity running expenses including all fund collection costs and charges. I guarantee they will not tell you. I have asked this many times and more often than not such a reasanble request is met with a somewhat hostile response. Well of course it is. What else would you expect.

    Until such time as there is a change and charities and those collecting for them are required to declare up front just how much of your cash will go to the end recipient after all expenses have been taken from that donation then I refuse to give any of my hard earned money to them. You should too.

    The basis on which most charities collect now is at best totally misleading and deceitful and at worst possibly fraudulent. If everyone took this approach things would soon change but unfortunately most people are much too easily duped and the deceipt and misleading practices continue. The end justifies the means apparently.

    Darren the comment you made about the Red Cross collecting on the basis of one cause and then redirecting some of that money to other of their pet projects is not isolated. They have been caught out on this a number of times and have had to admit publicly that this is what they have done. Indeed in another case I recall they suggested that this was not an uncommon practice for them and suggested that it was a perfectly reasonable practice.

    The sooner people just cease to give to charities until there is full transparency and dislosure up front on how collected funds will be used and allocated then the sooner there will be reform.

    It is only reasonable that if you are asked to give away your money to help others in need, you are told exactly how it will be spent. If they cannot or will not tell you, then you should be rightly suspicious and not give. The charity industry is just that – an industry – and should be treated just like any other industry.

    Apologies for this long comment but I just hate to see people being duped, misled and perhaps some would say,scammed. But this is seemingly what is happening on a grand scale in the charity industry.

    By the way, since my family donated an entire house to the Salvation Army some years ago I think we have done more than our fair share.

  3. I visited a grade school with my half blind guy pal recently and the kids were eating hot dogs. Armour Hot Dogs. So what kind of kids eat Armour Hotdogs? Fat kids, skinny kids, and even kids with chicken pox– eat hot dogs– Armour Hotdogs, the dogs kids like…. TO BITE.

    Now I am making fun here. Those are the lyrics to the Armour Hotdog Song which gets sung every year at my dog birthday party. And since I am a dog and a dog has one year for every seven of a human we sing the Armour Hotdog Song seven times a year here at the marina just for my birthdays.

  4. Darren, I agree. It’s after the initial shock, and the victims of a natural disaster have time to assess who was helpful, and who were more just like bureaucrats going through the motions, that The Salvation Army becomes close to their hearts. And, the Red Cross becomes disliked. The problem is the Red Cross are much better @ marketing themselves and hiring politicians like Elizabeth Dole to be their CEO’s. The Red Cross NEVER want any donations but cash. That says it all.

  5. Nick

    You’re probably right about the secularist issue. But my experience has been when someone is down and out or had their home destroyed by some disaster they usually don’t care who helps them, as long as someone does.

  6. Darren, The big problem is the MSM gives them free air time and constantly gives out their phone for contributions. I have noticed CNN giving a little props to the Salvation Army. I think the hard core secularists have a problem w/ the Salvation Army.

  7. Bron, I had you pegged as a nut scratcher. Did you know nut scratchers live longer and happier lives. And, nut scratchers are less like to die from testicular cancer because they feel the lumps @ a very early stage. A message for all fathers and fathers to be!

  8. Personally, I stopped contributing to the Red Cross after the debacle they had in the aftermath of the September 11th attacks. In that they solicited donations to support the victims of the attacks and after they received multimillions they diverted portions of that to other programs elsewhere. I had contributed money to that effort on the expectation it was going where they had promised it would. After having been duped, I never gave to them again.

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