dan pallotta blog

First Thoughts on “The 50 Worst Charities in America”

The Tampa Bay Times, Center for Investigative Reporting, and CNN cooperated on a story that came out this week that listed what it called, “The 50 Worst Charities in America.” Lots of you have asked for my thoughts on it. It’s been a busy week for me at Advertising for Humanity, with travel and speeches, and work getting the Charity Defense Council properly established. I have only had time to read the first installment of the story and haven’t yet seen the CNN pieces. Therefore, my ability to respond specifically right now is very limited.

That said, here’s what I do have to say:

1 - Not every charity deserves defending. Any charity that is deceiving donors should have the book thrown at them. Any charity or telemarketer that tells a donor X percent of the donation will go the cause when the charity or telemarketer doesn’t know what percentage will go to the cause, or when they know it isn’t X, should be prosecuted to the fullest extent of the law. I have NO idea whether any of the charities in these stories were deceiving donors in that way.

2 - Any story written by only two reporters that purports to know which fifty of the 1.5 million nonprofits in America are the “worst” is clearly using a headline to grab readers and is suspect to me from the start. From what I can tell, the reporters based their judgment on fundraising ratios. Presumably that data came from official forms. So, at the very least, these “fifty worst” charities must be complying with their reporting obligations. What about the charities that don’t even file 990s? What about the charities that aren’t legally registered to fundraise but do it anyway, and thus don’t file any reports with the various states attorneys general from which a reporter could draw any information? How do the reporters know those charities aren’t worse than the fifty they singled out?

3 - I never form a judgment based on what a news story says without a full hearing of the other side’s story. There are ALWAYS two sides to a story. ALWAYS. 

4 - The head of the Media Committee for the Charity Defense Council and I spoke to the reporters involved several weeks back, and encouraged them not to write a story based on overhead and fundraising ratios, but to write a story based on impact. It is time for the media to stop relying on financial metrics and to begin the hard work of finding out what good the charity is or isn’t doing.

5 - One commenter wrote that, “Donors not knowing that all their money is going to a for-profit fundraiser is wrong. Plain and simple.” I assert that it’s not that simple. Many of our favorite charities do major gift development and direct mail acquisition in which the subset of related donors may well not know that for a year, or two, or three, none of their money is going to “the cause” as they think of the cause. It’s going into generating a donor base, which will in time multiply the money going to the cause. So it’s not plain and simple.

6 - The commenter’s point has huge implications for joint cost allocations as applied by tens of thousands of charities in America.

7 - Bottom line for now, we have to stop collapsing impact questions with criminal justice questions. If fraud has been committed, don’t do a story that uses fundraising ratios alone to label charities the “worst.” Do a story on criminality and fraud in a subset of charities. When you conflate fundraising ratios with good and bad you further public misunderstanding of how a charity’s value ought to be measured. The logical extension of this story is that the next 50 worst charities are the ones with the next 50 worst fundraising ratios and then the next fifty, and on and on. You once again glorify a broken and fatally flawed measure.

The Charity Defense Council and/or I will have a thoughtful response to the story in time when we’ve had a chance to thoughtfully dissect it.


  1. gasoline-and-matches reblogged this from danpallotta
  2. danpallotta posted this