Telethons and The Special Olympics:

WHERE DOES THAT MONEY REALLY GO?
Some Revelations & How to Get More Information

by Keith Storey

Problems with the telethon organizations - the Muscular Dystrophy Association, United Cerebral Palsy, Easter Seals and the Arthritis Foundation - as well as the Special Olympics, have been well documented in this and other disability publications. But there's an issue which has been raised and discussed that still needs clear documentation: where does the money come from, and where does it go?

As I would talk about concerns with telethons and the Special Olympics in my classes, students would ask, "How much money do they take in? Where does it go?" I decided to find out.

Getting the information

Getting the information is not easy. All non-profit organizations are required to make their IRS form 990s filed in the past three years available for inspection to the public on request at the charity's main office.

With all of the five organizations reported on here, it took repeated phone calls and registered letters over many months to get them to send information - especially their IRS 990 forms. I started this project in the fall of 1996 and spent until August, 1997 trying to get information.

The MDA refused to send me their IRS 990 forms. I had to go to one of their regional offices where I was told (according to a letter from their central office) that I could not photocopy any information (unless I had brought my personal scanner!), that I had to leave all my things and go into a room with only a pencil and pad of paper to write down information, and that a staff person had to be with me while I did so. So much for helpfulness!

The American Institute of Philanthropy was also a good source of information on these groups.

MDA

The MDA reported that in its 1995 fiscal year, it paid Executive Director Robert Ross a salary of $300,000. Five staff members make over $100,000 per year (Gerald Weinberg, Director of Field Organization, makes $230,000 a year). Fifty-nine employees were paid over $50,000 per year.

According to the American Institute of Philanthropy's report, the MDA spent 69-74 percent "on charitable purpose" that year. That's a phrase the AIP uses in its reports. It's "the portion of total expenses that is spent on charitable programs. In AIP's view," says its report,. "60 percent or greater is reasonable for most charities."

According to AIP, it cost MDA $22-28 to raise every $100. AIP says that "$35 or less to raise $100 is reasonable for most charities." The AIP gave MDA a "Grade B" - Good.

Easter Seals

The National Easter Seal Society's Form 990 for 1995 showed that, for the fiscal year ending August 31, 1996, it paid Assistant Secretary to the Board of Directors James Williams $267,000, plus $29,343 in benefits. Chief Executive Director Donald Jackson got $197,400 plus $21,694 in benefits. Senior Vice-President Christopher Cleghorn received $167,395 plus $18,395 in benefits. Executive Vice-President Joseph Romer received $157,741 plus $17,336 in benefits; Vice President for Development Robert Taylor got $135,900 plus $14,935 in benefits and Norman Grunewald, the Vice President for Development and Quality Assurance, got $94,100 plus $10,342 in benefits. Twenty-nine National Easter Seal Society employees made over $50,000 that year, according to their 990 form.

Many non-profit organizations use commercial fundraisers. When you get a call from a charity, in may in fact be from one of these commercial fundraisers.

The National Easter Seal Society used My Favorite Charities as a commercial fundraiser. The December, 1996 California Attorney General's Report on Charitable Solicitation by Commercial Fundraisers reported that My Favorite Charities raised $101 for the Society; for this the Society paid My Favorite Charities $3,399. The AIP reports that in that year the National Easter Seal Society spent 57-80 percent "on charitable purpose" and their "cost to raise $100" was anywhere from $24 to $57. AIP rated them Grade D (Unsatisfactory).

Arthritis Foundation

The Arthritis Foundation reported on its 990 form that in 1996 its President, Don Riggin, made $220,250, and got $8,644 for an expense account and other allowances. Six employees, they report, made over $100,000 that year; 31 were paid over $50,000.

The Arthritis Foundation also used My Favorite Charities as a commercial fundraiser. The same California Attorney General's report showed that for the $150 raised through My Favorite Charities, the Foundation paid the fundraiser $3,350. According to the AIP, The Arthritis Foundation spent 70-80 percent "on charitable purpose"; their "cost to raise $100" ranged between $14 and $24. The AIP rated them Grade B (Good).

United Cerebral Palsy

The United Cerebral Palsy Association, for the year ending Sept. 30, 1996, paid Executive Director Michael Morris $175,000. Four employees got over $100,000 in annual salaries. Fifteen employees made more than $50,000 that year The UCPA, said AIP, spent 84 percent "on charitable purpose"; their "cost to raise $100" was $7. Their AIP rating was Grade A (Excellent).

 

Special Olympics

The Special Olympics reported on its 1995 Form 990 that did not pay Sargent Shriver, its CEO and Chairman of the Board, any salary. But he did receive $5,640 for the use of a company car. Chief Operating Officer Edgar May got $135,633 in pay - plus $19,588 for the use of a company car and apartment. Director Robert S. Shriver, III received $135,000 in pay, for services provided in both 1994 and 1995, said the 990 form. Special Olympics paid five employees over $90,000 that year; 25 employees made more than $50,000.

It is interesting to note that the Special Olympics paid Epsilon, identified as a direct mail consultant, $611,818, and telemarketing consultant Meyer Associates $552,983. The firm of Robinson, Lake, Sawyer, Miller got $318,622 for "Public Awareness with respect to the 1995 Special Olympics World Games." Kershner & Company was paid $292,763 for a "Public Awareness Campaign Nationally." Attorney Cherry Joy Beysselance got $134,458 from the organization that year.

A number of Special Olympics groups in California also raised money; their efforts are detailed in the Attorney General's Report.

Northern California Special Olympics used Capa, Inc. of Chattanooga, Tennessee as a Commercial Fundraiser in 1995 to raise $45,241 - of which 10 percent ($4,524) went to the Special Olympics.

Whose favorite charities? The commercial fundraiser "My Favorite Charities" was hired by both Easter Seals and the Arthritis Foundation.   For Easter Seals, My Favorite Charities raised $101 but were paid $3,399   For The Arthritis Foundation , My Favorite Charities raised 150 but were paid $3,350   Source: December, 1996 California Attorney General's Report on Charitable Solicitation by Commercial Fundraisers

Southern California Special Olympics used Dialamerica Marketing Inc. of Mahway, NJ as a commercial fundraiser. They raised $106,560; $31,578 (29.6 percent) of that went to the Special Olympics. The group called California Special Olympics used Dialamerica Marketing Inc. of Mahway, NJ also: They raised $477,658 - of which $222,568 (46.6 percent) went to the Special Olympics. California Special Olympics also used Heritage Publishing Company of Sherwood, Arizona as a commercial fundraiser. Heritage raised $830,533 for them. Of that amount, $274,674 (33.1 percent) went to the Special Olympics.

The International Special Olympics - the corporate head of Special Olympics - used Meyer Associates, Inc. of St. Cloud, Minnesota as a commercial fundraiser; Meyer raised $68,330. Of that, $39,090 (57.2 percent) went to the Special Olympics.

The AIP reported that 57-70 percent of the corporate group's expenses were "on charitable purpose." Their "cost to raise $100" fell between $23 and $36. Their AIP rating was grade C (Satisfactory).

Are these salaries and expenses reasonable, or are they part of the economic exploitation of people with disabilities?

Are the data presented for these organizations representative of other disability organizations? There are perhaps no clear-cut answers to these issues. But disability activists can certainly use this information as they see fit. It is clear , though, that we need this kind of information in order to make judgments about financial issues in disability organizations.

 

How to Get Financial Information about Fundraising Charities

All charitable organizations are required to provide a copy of IRS 990 forms upon request. They only have to allow you to ""inspect" them, however - they aren't required to make a copy for you. Here's how to go about getting them:

1. Make a phone call to the charity. Ask for a copy of their "latest financial report and IRS 990 forms."

Make sure that you get the IRS 990 forms - because they will have a lot of important information not in the financial report. Be sure to get the name of the person you talk to; record the date and time that you made your request.

2. If you get no response to your phone call, send a registered letter asking for the above information.

3. As a final measure, you can contact the IRS for the 990 form. To do this, you must fill out and submit a Form 456A (a request for a copy of an exempt organization's tax form). On this form, be as specific as possible: include the name and address of the organization (and be sure you have its name correct!) specify what years' 990 forms you want. The charge is $1 for the first page and 15 cents for each subsequent page. Requests for 990s must be sent to the IRS Ogden Service Center, PO Box 9941, Mailstop 6734, Ogden, UT 84409. The toll-free phone number is 800/829-3676.

4. Try Web sites. Here are some Internet web sites for more information:

• GuideStar (www.Guidestar.org)
• Better Business Bureau (www.bbb.org
• Foundation Center (www.fdncenter.org)
• National Charities Information Bureau (www.give.org)
• National Committee for Responsive Philanthropy (www.primenet.com/~ncrp/)
• Internet Nonprofit Center (www.nonprofits.org).

5. Contact overview organizations. These groups issue reports such as the ones used in this story:

American Institute of Philanthropy, 4579 Laclede Avenue, Suite 136, St. Louis, MO 63108, 314/454-3040.

Independent Sector, National Center for Charity Statistics, 1828 L Street, NW, Suite 120, Washington, DC 20036.

6. Get Commercial Fundraiser Information from your state. Most states keep information on commercial fundraisers. To get copies of the reports, write to the Attorney General of your state. In California request the "Attorney General's Report on Charitable Solicitation by Commercial Fundraisers." Other states have similar reports.

Keith Storey is an Associate Professor of Education at Chapman University in Concord, California.

The money dodge A new telethon! Reeve imitates Lewis Folks who felt that, given enough time, Christopher Reeve would see the light of disability rights are having to adjust their hopes downward once again. The man's started a new telethon. The cure-above-all superstar's Circle of Friends "fundraising television program" debuted in October and aired throughout the fall in the New York area and on various cable television outlets. It's small yet, but it has big ambitions. (If it looks like a telethon, and sounds like a telethon . . . ) According to Christopher Reeve Foundation p.r., Susan Sarandon, Paul Newman, Meryl Streep and Mel Gibson will work to "find a cure for the 250,000 Americans with spinal cord injury paralysis." Chaka Khan's cut a telethon song, "Shining Star,' "paraphrasing Reeve's statements . . . about the importance of having the suport of others during a time of personal tragedy." Cyberdonors! Donors to the MDA telethon can now send their bucks through MDA's website (www.mdausa.org), courtesy of AT&T, who announced it's donating its "AT&T SecureBuy Service" to the 'thon to let folks make "secure donations year-round that will help MDA in its fight against 40 neuromuscular disorders." "Every cyberdonor who gives $25 or more gets a bonus - two free, 50-minute AT&T prepaid calling cards," says AT&T.