By Jim Judge
BBB Charity Information Director
The Foundation for Children with Cancer, a St. Louis charity which solicits nationwide, continues to get most of its funding through a contract with a telemarketing company that takes nearly 90 cents of every dollar raised for the charity.
The president of the group, Renee L. Verhoff, initially blamed the arrangement on the charity’s founder and former president who resigned under pressure in March 2006. Last week, after the St. Louis Better Business Bureau (BBB) inspected a copy of the fundraising contract, Verhoff acknowledged that she has some responsibility for the current lopsided contract.
Verhoff said the agreement with Charitable Resource Foundation of Greenwood, Ind., was automatically renewed in July 2007 when she, the charity’s attorneys and its board members forgot to notify the professional fundraising firm that the charity wanted to cancel the agreement.
The Charitable Resource Foundation is well known in the nonprofit and law enforcement communities for its questionable fundraising contracts.
Jim Judge, Director of the BBB Charity Information Service, said the agreement between the children’s cancer foundation and Charitable Resource Foundation raises serious questions about how the charity is supported.
“If a charity – no matter how good its work – gives nearly 90 percent of its donations to a fundraising company, it is a sign of an inefficient organization,” he said. “We question whether donors would give to a charity if they knew that only pennies of their gifts were actually getting to children with cancer and their families.”
Washington University’s ThurtenE Carnival, an event set up to showcase the university to the community, gave all proceeds to the Foundation for Children with Cancer. The carnival began in 1904 and in recent years has selected a charity to receive proceeds from the event.
Student representatives of ThurtenE Honorary, the organization that oversees the carnival, told the BBB that they selected the Foundation for Children with Cancer based largely on an interview with organization representatives. They acknowledged that they did not do an extensive background check on the foundation and were not aware of its fundraising history.
Foundation for Children with Cancer has offices at 11327 Gravois Road. It solicits donations nationally and uses its money to make grants to families of children suffering from cancer.
In its 2007 report to the Internal Revenue Service, the most current information available, the charity says it raised nearly $3.2 million. Of that amount, the charity says, about $271,000, or 8.5% percent, went directly to benefit children with cancer and their families.
The BBB Wise Giving Alliance, Arlington, Va., reports that the charity failed several standards dealing with measuring effectiveness and finances.
The charity also came under public criticism in early 2006, when the St. Louis Post-Dispatch revealed that the charity, then known as Reach Our Children, paid $3 million over a three-year period to a marketing company co-owned by the wife of founder and president David Lovell. Lovell soon was forced to leave the charity, and Verhoff was named to succeed him as president.
That same year, Verhoff said that the board was trying to renegotiate its contract with Charitable Resource Foundation, which was paying the charity 12 percent of all donations it raised.
In an email to the BBB in February, Verhoff said its fundraising costs continued to be high “but it is due to contracts that D. Lovell had signed off on before he left that we can’t get out of.
“We are trying,” she said, “but it’s next to impossible (it would cost us more in legal fees than we care to spend).”
After the BBB noted that the contract signed by Lovell would have expired, Verhoff said she, the charity’s lawyers and its directors were to blame for “slipping up” and allowing the contract to remain in effect.
The BBB offers the following tips to help donors make wise giving decisions:
- If you are unfamiliar with the organization, don't hesitate to ask for written information about its programs and finances.
- Don't succumb to pressure to give money on the spot. A charity that can use your money today will welcome it just as much tomorrow.
- Watch out for appeals that bring tears to your eyes, but tell you nothing about how your donation will be used.
- Don't assume a Web site is affiliated with a nonprofit organization just because ".org" appears at the end of the internet address. To verify if a group is tax-exempt as a charity under section 501(c)(3) of the Internal Revenue Code, visit www.irs.gov.
For more information on a charitable organization, you may wish to call the BBB at (314) 645-3300 or www.bbb.org for a report.