We should have expected it, but the Congressional hearing on egregious fundraising practices among veterans organizations and the unusual “nonprofit entrepreneurs” running a couple of them reminded us of a slight problem of nonprofit sector amnesia. The Cohen Report has been monitoring this issue of abusing veterans through despicable charities for some time now.
In spite of this we were taken aback at Richard Viguerie’s misuse of a First Amendment defense. The veterans charities examined on Capitol Hill had hired and significantly bankrolled the direct mail firm run by Richard Viguerie, a long time conservative activist and fundraiser. At the hearing, Viguerie cloaked the high costs and puny charitable returns for his veterans fundraising with the mantle of free speech: “Viguerie said direct-mail flyers, stickers and trinkets do ‘far more’ than bring in donations, raising awareness of the problems some veterans face.” The national nonprofit leaders cited in the WashPo article and others talked about making sure that funds raised for charity get used for charity, but everyone sidestepped putting the clamps on schemes like Viguerie’s (and Roger Chapin’s, the high paid “nonprofit entrepreneur” behind the Coalition to Support America’s Heroes and Help Hospitalized Veterans), much less raising even an arched eyebrow at the notion that Viguerie and Chapin are educating the public about veterans problems. Why? Because it was that “educational” function that national nonprofit trade associations used in a Supreme Court case (Madigan v. Telemarketing Associates) to defend fundraising even if such organizations generated only 3 cents out of every dollar for the organization’s ostensible charitable purpose.
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In “Free Speech or Fraud,” we expressed our disgust at associating the concept of free speech with these practices. With the help of most of the national nonprofit leadership organizations, the Court came to see calls for various kinds of disclosures on these telemarketers as an infringement on nonprofit free speech rights. Tell that to the Marines—or Army, Navy, Air Force, or Coast Guard veterans who keep getting ripped off by these charities. As we wrote at the time, hiding behind the free speech provisions of the Bill of Rights constituted “Fraud After All.”