Wacky Failed Fundraising Program: FreedomWorks and Glenn Beck

Photo Credit: Gage Skidmore via Flickr

January 4, 2013: Source: Atlantic Wire

Here’s an interesting example of a tax-exempt expenditure. According to its founder and former chairman, Dick Armey, the Tea Party group FreedomWorks paid conservative talking head Glenn Beck approximately $1 million to say “nice things” about FreedomWorks on his radio program.

It was reportedly a FreedomWorks fundraising strategy! The $1 million to get Glenn Beck plumping for FreedomWorks was envisioned to generate donations, but Armey said that it didn’t pay off. According to Armey, the million for Beck is “a damned expensive way to raise money; and… it makes raising money an end [unto] itself not an instrumental activity to support the foundation work that our organization does.” His analysis is a cost-of-fundraising question: “We count the receipts we get from people who have sent in money, and we, meaning they, I am not a part of it anymore, do not count what the funds that are laying out are. They don’t say, we paid Beck a million dollars and we had this program where we raised $300,000, you had a net cost of $600,000, or whatever the numbers are.”

Armey doesn’t address the fundraising impact of the deal that he got to leave FreedomWorks, a commitment of payments of $400,000 a year for 20 years, promised by FreedomWorks donor Richard J. Stephenson, the founder of Cancer Treatment Centers of America. The payments to Armey were reportedly meant to make sure he kept quiet about his brouhaha with FreedomWorks Executive Director Matt Kibbe until after the election. Paying Armey $8 million to do nothing for the organization doesn’t sound like efficient use of a donor’s money.

In light of the previous coverage of the attempted Armey takeover of FreedomWorks and his subsequent ouster, it is difficult to feel a scintilla of sympathy for Armey, Kibbe, Stephenson, Beck, and FreedomWorks itself. The organization’s self-immolation is an ongoing case study of disastrously wacky fundraising, clearly deficient transparency, bad political choices, and out-of-control egos. An organizational autopsy of FreedomWorks is definitely called for and likely to be used in nonprofit organizational management courses throughout the nation.—Rick Cohen

  • Bonnie Osinski

    FreedomWorks does not understand that saying nice things about an organization on the radio is not fundraising at all.

  • Jon Pratt

    Paying a former organization leader $400,000 a year for 20 years wouldn’t seem to qualify as proper corporate purpose unless he is delivering services with that value, no matter how grateful the organization.

    As for an organizational autopsy — great idea — one option could be for the Nonprofit Quarterly to establish a special Nonprofit CSI Unit to conduct these investigations.

    [cue Who song “Won’t Get Fooled Again”]

  • rick cohen

    I had thought about writing something in the piece as to whether the $400k counts toward FreedomWorks’s program, but nonprofit cost allocation humor only goes so far, and in any case, I’ll bet that these payments won’t run through FreedomWorks even though the source is a FreedomWorks donor and it was done to protect FreedomWorks from the debacle of Armey loudly departing from the organization before the election. As you know, I love doing organizational autopsies! I actually did several of them in a previous career. I’d rather see NPQ emulate Law and Order rather than CSI, so then we could see if I could play Bobby Goren from Criminal Content and Ruth could be Olivia Benson from SVU.

  • Anon

    The story writer has a major fact wrong. A FW donor’s business is paying Armey $400k a year for consulting, independent of the group. Kind of a huge difference from what you are reporting.

  • Anon

    The autopsy should be done by someone clever enough to read the many stories in the press about how Armey’s payments are not being made by, nor run through, FW.