Donor Advisory Issued on Berman “Charities”

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April 5, 2013; Source: Mother Jones

In light of last week’s feature articles by Bill Schambra of the Hudson Institute and Ken Berger of Charity Navigator, the report from Mother Jones citing a recent action by Charity Navigator reveals something positive about the agencies that monitor and rate charities. According to MoJo, Navigator has issued a “donor advisory” about five nonprofits associated with one Richard Berman. Rick Berman runs a for-profit advertising firm that is behind several nonprofits well known for their defense of some of the worst corporate practices. In his long track record of creating politically minded nonprofits, he formed an industry organization to compete with Mothers Against Drunk Driving, he consulted with groups fighting against raising the minimum wage, and he worked with the tobacco industry.

As its website proclaims, “Berman and Company isn’t your average PR firm. Our mission is to ‘change the debate,’ not simply contribute to it. Through our fact-based, hard-hitting approach to public relations and issue advocacy, Berman and Company makes the public think twice about commonly held assumptions.” President and founder Rick Berman goes on to say, “My goal is to make people say, ‘I’ve never thought of it that way before.’” By challenging MADD, vigorously opposing increases in the minimum wage, and supporting noxious corporate players, Berman’s firm lives up to that credo. There is no shying away from his beliefs. The website touts case studies of his opposition to health care reform through the Employment Policies Institute, the Employee Freedom Action Committee and their “Rethink Reform” campaign, EPI’s “Defeat the Debt” campaign, and its union watchdog group, the Center for Union Facts.

Citizens for Responsibility and Ethics in Washington (CREW) has a “Berman Exposed” website that says Berman runs 23 industry-funded projects. Five of his groups have been cited by Charity Navigator for the fact that “the majority of the expenses for these groups are in fact payments to Berman and Company,” warranting CN donor advisory warnings.

For example, regarding the Center for Consumer Freedom, CCF’s 2010 Form 990 showed that “out of total program expenses of $2.4 million, $1.7 million is going directly to Berman and Company”; the 2011 Form 990 for the American Beverage Institute “revealed that, out of total expenses of $1.7 million, $1.3 million is going directly to Berman and Company”; for the Center for Union Facts, $800,000 out of $1.2 million went to Berman’s company ; for the Employment Policies Institute Foundation, $1.1 million out of $1.9 million went to Berman; and $82,000 out of $136,000 to Berman at the Enterprise Freedom Action Committee.

Charity Navigator’s donor advisories aren’t ratings. They point out serious problems with these five organizations that most donors might not notice, unlikely as they are to dig into their 990s to identify the amounts of money going to top vendors. Notwithstanding the debate over ratings and measurements, the charitable sector—like our society overall—needs more watchdogs, and CN shows its value in this role.—Rick Cohen

  • John Paul

    The CCF donor advisory is the direct result of pressure and intimidation by the Humane Society of the United States, which knows how to take advantage of the fact that Charity Navigator is not a watchdog, but a very weak and easily influenced “evaluator,” whose ratings and reputation have taken a big hit in the last two years. In fact, whenever the media investigates charities (not often enough) Charity Navigator’s clueless CEO ends up as part of the story – not in a good way. Donor donor advisories only show up when CN’s ineptitude is exposed – by CNN, CharityWatch (the only nonprofit watchdog), CBS 60 Minutes, and even the National Enquirer. Some examples: CN gave four stars to Charity Watch F-rated Feed the Children, Greg Mortensen’s “60 Minutes”-exposed East Asian Institute, F-rated National Veterans Foundation, televangelist Don Stewart’s Feeding America’s Hungry Children (which takes the religious exemption with CharityWatch to avoid a real critique), the F-rated National Cancer Coalition, the D and F rated (in different years) Diabetes Research and Wellness Foundation, and the always D-rated HSUS, to name a handful. Only after Feed the Children imploded in a variety of ways (including CBS Evening News catching them lying about their work in Haiti), did CN issue a donor advisory. Only after the National Veterans Foundation was part of a devastating CNN series on the money laundering (HSUS contractor/business partner) Quadriga Art, did a Donor Advisory appear. Even the National Enquirer recently exposed the National Cancer Coalition as a scam, a scam peddling their “4 star” rating (thanks, Charity Navigator) in order to hoodwink donors.

    The parent company of Diabetes Research and Wellness Foundation, which was sanctioned by the Charity Commission UK for spending the bulk of it’s money running international sweepstakes scams, is Market Development Group. Remember your short article in this publication in 2009 about the Wall Street Journal’s “French Investigators Look Into Charities?” Market Development Group subcontracts it’s mail packages to Quadriga, and HSUS’s fundraising consultants act as middlemen. Both Quadriga and MDG are long-time HSUS mail mills. Interestingly, Market Development Group has been paying HSUS $50,000 a year for nearly a decade to sponsor one of their charitable programs, a Beverly Hills fundraising gala and award show. And HSUS paid Quadriga $25 million for it’s fundraising services in the past 3 years alone. By the way, CCF doesn’t even know about much of this. I do. I don’t work for CCF. I’m in the nonprofit field and used to be an HSUS member. Ken Berger is too afraid of HSUS to act on any of these Donor Advisory worthy, easily documented revelations about HSUS. The truth about the origins of this Center for Consumer Freedom advisory and the weird relationship between HSUS and Charity Navigator will come out. Ken Berger is simply parroting the HSUS slander the messenger tactic. Hypocritical, considering that the baggage HSUS has been carrying makes CCF’s violations look like typos. The founder of Charity Navigator, Doug White, commented on a December 28th USA Today article that he wishes CN would go away, as it is doing more harm than good. I wonder what he would say about HSUS thugs’ sleazy efforts to get CN to help them destroy Rick Berman’s groups while holding a knife to their throat, demanding another 4 star rating or else. If CCF went away tomorrow, HSUS would still be up to it’s eyeballs in sleaze and scandals.

    People appalled by this should spread the word. HSUS did the analysis and pressured/demanded that CN act on it. Charity Navigator certainly doesn’t conduct this kind of review, and CCF isn’t a traditional charity anyway. Not only does Charity Navigator mechanically crunch data provided by the charities, it accepts – unquestioned – false and misleading information. CN regurgitates The National Cancer Coalition’s claim of spending 97% on programs, as well as the laughable one from notorious televangelist Don Stewart that his “charity” spends 99% on program services. A three-time Pulitzer prize nominated reporter for the Arizona Republic spent a year investigating Don Stewart’s charity empire and noted Charity Navigator’s (WTF) sterling ratings for more than one of his front groups. Charity Navigator must believe that sweepstakes are charitable services, since they parrot the Diabetes and Wellness Foundation’s figure of 81% for charitable deeds. Few people know that three or four of Don Stewart’s 22 “charities” are clients of Market Development Group, whose list division rents out various Don Stewart donor and sweepstakes donor lists, in the United States and overseas. Few people know that HSUS is MDG’s biggest client and that MDG’s in house list broker rents out ELEVEN HSUS lists, including a sweepstakes list. HSUS spends 46% on overhead/fundraising, according to animal rights newspaper Animal People’s annual Watchdog Report, but will sue Charity Navigator if they enforce the joint accounting loophole in their (oh so special) case. Even if these (boring to read and understand) technical violations by CCF are true, it is inappropriate and unseemly for a “charity” to bully a rating service into punishing the object of their sick obsession. Especially an organization as sleazy as HSUS. Getting in bed with a group you rate is a no-no, according to nonprofit experts. Clearly HSUS is desperate to present itself as a victim and CCF as a villain. For decades, HSUS has tried to manipulate the media into believing they are the greatest, most effective animal organization ever. In the age of the internet, however, it is becoming increasingly difficult to get away with things like:

    – Raising $34.6 million after Hurricane Katrina and misappropriating 80% of it, while botching their relief and rescue work. The Louisiana Attorney General launched an 18 month investigation after dozens of local shelters, rescues, HSUS volunteers, bloggers, and big national name-brand animal charities complained. The HSUS CEO blamed the Center for Consumer Freedom for the investigation, while claiming that HSUS rescued 10,000 animals and reunited 2,500 with their owners. The truth is 20% of that, just like the amount of money raised that was spent on the disaster. And the total number of reunions from all rescues was under 2,500, two years after Katrina. HSUS stalled and stalled, while trying to quash the investigation because they could not provide the Attorney General with documents to back up their claims regarding where the money went. After 18 months, HSUS was reduced to using the legal loophole that they weren’t raising money for Katrina but for their Disaster Relief Fund as a whole. They were prepared to go to trial with that argument. To this day, all they can offer is a press release on their great Katrina work, with vague numbers and claims, but few details, links, documents, invoices, or third party verifications to back up the majority of those empty words. Katrina is just one of their many fundraising scandals. HSUS is also on the hook in the Feld Entertainment case, now in it’s third stage with a RICO lawsuit. Another $5 million suit for an illegal raid and seizure of animals in South Dakota is hanging over their heads as I type.

    For more about HSUS, read “Betrayal and Deceit at the Humane Society of the United States” by animal sheltering expert Nathan Winograd. CCF is the least of their problems. Even if they were to succeed in their wacky attempt to destroy CCF, they are in danger of imploding in scandals of their own making. Part 2 of 2 tomorrow.

  • John Paul

    Sorry, but it took 2 weeks to settle my tummy after wading through the slime that is HSUS for your edification.

    I remember when it only took only one week for my body and soul to recover. But that was before That HSUS:

    – hired (away from PETA) Matt Prescott, creator of the “Holocaust on Your Plate” campaign. Prescott lied to the Holocaust Museum in order to obtain photos of starving Jews to be used in an anti-animal agriculture exhibit and traveling road show. Images of farm animals juxtaposed to graphic images of concentration camp victims. Prescott never apologized for the display and never apologized for his deceit;

    – raised tens of millions “for Hurricane Sandy” but reported just $1.9 million to the NY Attorney General – and could only account for $400,000 of that;

    – took huge sums of money from Michael Vick’s supporters in exchange for helping Vick reform his image as a rehabilitated dog lover. Later, CEO Wayne Pacelle fell in love with him;

    – took huge sums of money from Arthur E. Benjamin, a for-profit trade school Bernie Madoff. His sleazy “education mill,” ATI Enterprises, fleeced nearly $250,000,000 from the federal government, was shut down by Texas authorities, and is under investigation by the Justice Department. HSUS CEO Wayne Pacelle, knew about the scandal for years. He recently appointed Arthur Benjamin to the HSUS’s National Council. The dude loves criminals!

    – hired bar and strip-club hopping deviants Scotlund Haisley and Rowdy Shaw to run the HSUS’s Emergency Response Team. Havoc, fraud, sexism, and animal exploitation ensued. Lawsuits were filed. Some are pending. The entire Animal Rescue Team resigned rather than participate in illegal raids and animal seizures, rather than follow the CEO’s desired protocol that exploitis both real cases and false allegations of cruelty in order to raise huge sums of cash and get those wife beater t shirts on teevee. Lots more I could say.

    HSUS’s newest PR agency, Charity Navigator, has been discredited many times but is more concerned with image, power and money than protecting the average donor from charity fraud. Charity Navigator had many chances to improve it’s methodology, but refused. Arrogance plus incompetence is always a disaster, but getting in bed with the likes of HSUS is beyond pathetic.

  • John Paul

    Charity Navigator in bed with HSUS =
    Charity Navigator in bed with for-profit education mill kingpin Arthur E Benjamin =
    Charity Navigator in bed with Quadriga honchos and HSUS’s Quadriga “consultants” =
    Charity Navigator in bed with Market Development Group and it’s overseas “businesses” involving HSUS =
    Charity Navigator in bed with the creator of the “Holocaust on Your Plate” campaign, HSUS’s Matt Prescott =
    Charity Navigator in bed with former Animal Liberation Front convicted criminal, HSUS’s J.P. Goodwin

    My mom once reminded me that in the age of Aids, you are sleeping with everyone your partner slept with. I already knew that. I’m careful. I’m smart.

    You can’t fix stupid. Add arrogance to the mix and you get the mess described in this article.