Veterans Charity Loses $830,000 to Theft – and Tens of Millions to Costly Fundraising

by Categorized: Law Enforcement, Non-profits Date:

My colleague Kelly Glista reports that a bookkeeper for the National Veterans Services Fund has been accused of embezzling more than $830,000 from the Darien-based nonprofit.

But that’s pennies compared to the millions the charity loses year after year in lopsided fundraising contracts.NVSFlogo

As I’ve written before, charity watchdogs consider the National Veterans Services Fund among the worst nonprofits in the nation, consistently receiving pennies on the dollar for the millions raised from patriotic Americans.

When I first wrote about the National Veterans Services Fund for a 2005 story on veterans charities, fundraising costs at the organization were eating up nearly 98 cents of every dollar raised Рmeaning every time a generous donor gave $500, all but $11 of that donation was spent on printing and mailing costs or pocketed by professional fundraisers. That made it the least efficient of the 286 veterans charities analyzed by the Courant.

I checked in again on the charity a year ago, after Charity Navigator, a respected rating agency, put the National Veterans Services Fund at the top of its list of “consistently low rated charities” – earning zero-star ratings for ten straight years. By then, the charity’s deal with fundraisers allowed the solicitors to keep as much as 84 cents of every dollar raised – an improvement, but still five times what the average veterans charity spends on fundraising.

Overall, from 2000 to 2012, Americans who were solicited by phone and mail donated $72 million to the National Veterans Services Fund, according to its IRS filings. But $56 million of that donated money came off the top to cover the cost of all that soliciting. Even among veterans charities that use expensive professional fundraisers, the Darien charity’s fundraising percentage is more than twice that of other nonprofits. That gap alone amounts to $30 million in donated money since 2000 that wasn’t spent on charity.

Cynthia Tanner could face 20 years in prison if convicted of diverting $830,000 from the charity. Meanwhile, the National Veterans Services Fund spends about that much on fundraising every 40 days. Phil Kraft, the organization’s president, treasurer and executive director, has a ready answer to concerns about the charity’s huge fundraising costs, saying those unfavorable contracts with professional fundraisers are the only way he can stay in business.

His response a year ago was nearly identical to what he told me in 2005: “A small percentage of something is better than 100 percent of nothing.”

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