Charity pushes back against CNN and Tampa Bay Times. CNN stands firm.

The charity at the top of the America’s Worst Charities list compiled by the Tampa Bay Times, Center for Investigative Research and CNN, Kids Wish Network, is pushing back against the methodology. You can see the detail about the Times’ reporting on the charity here.

(This post will be a deep inside-baseball discussion.)

You can see the rebuttal here.

A major accusation from the charity is that a staff person allegedly took a copy of the organization’s donor data base for use in starting a new charity. This person was the first former employee to speak on the record.  If the accusation is true, this is a very big deal.  The organization called in the police and FBI.

According to CNN’s report the FBI and local police closed their investigations and returned the computers.  According to the charity’s article, the US Attorney General declined to prosecute. Interpret that as you wish.

Those allegations are a major part of the overall story but seem to be unrelated to the reporting by the Times, CIR, and CNN.  All the information about the charity in the reports can be found in the organization’s 990 filings for the last decade which are available at the Time’s website. You can see all the source documents for yourself.

The pushback continues by repeating the program expense numbers in the 990. That’s where the 56% number comes from – straight from the functional allocation page of the 990. Divide reported program expenses by total expenses and you will get 56%.

The rebuttal includes a quote from Mr. Dan Pallotta placed in such a way as to criticize the reporting by Tampa Bay Times and imply support for the charity.  The quote provides rather weak and indirect support since it was only Mr. Pallotta’s initial reaction to the reporting before he had even read all the articles in the series. I’m guessing that specific comment was made before he even had a chance to look at the methodology or any tax returns.

CNN’s same-day response can be seen here. You can view the video from that page.

As to why charities would have non-disclosure agreements, it would be to protect things like their donor list. If that had been taken by an employee (a signficant allegation but only an allegation at this point) it would be a big deal. Again, that may be a big issue but it is a minor tangent to the main story.

The 8-minute CNN video segment summarizes the story and explains their methodology again. The focus is on what to do with telemarketing costs and GIK sent outside the country.

If you want an explanation of the issue that doesn’t involve numbers and is in visual format, check out the CNN report. If hard numbers and print are better for you, check out the Times’ website.

See my post earlier today for an illustration of analyzing a 990 so you can do some calculations on your own.

The charity’s comments and CNN’s reply have gotten a lot of comments on Twitter today.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: