The Federal Trade Commission has taken the unusual step of fining four non-profit cancer charities, each of them run by different members of the same family. The FTC says that the family has bilked contributors who thought they were helping cancer patients out of nearly $200 million in donations.
In a rare joint action with attorneys general for each of the 50 states, the Federal Trade Commission says four cancer charities run by extended members of the same family conned donors out of $187 million from 2008 through 2012 and spent almost nothing to help actual cancer patients.
Each of the charities charged were the subject of extensive reporting by CNN in 2013. And in each instance, none of the four charities would comment. We were ordered out of the building at the Cancer Fund of America in Knoxville, Tennessee, and were the object of an obscene gesture by the CEO of The Breast Cancer Society in Mesa, Arizona.
The Cancer Fund of America is run by James Reynolds Sr. His son James Reynolds Jr. is the CEO of the Breast Cancer Society. Another charity, the Children’s Cancer Fund of America, is run by Rose Perkins, the ex-wife of the elder James Reynolds. He’s also the CEO of the fourth charity, Cancer Support Services.
The government says the charities claimed to provide direct support for cancer patients, breast cancer patients and children with cancer.
“These were lies,” the government’s complaint says.
Jessica Rich, chief of the FTC’s Bureau of Consumer Protection, says that in all, the charities spent about 97% of donations they received either on private fundraisers or on themselves. Only 3%, she says, went to help actual cancer patients.
The fines add up to about $90 million, but it’s likely that the government will recover little of it. But the charities are closing down, so at least people won’t be scammed by them anymore. This is why Foundation Beyond Belief spends so much time and effort vetting potential beneficiaries. We stick with smaller charities, ones that will be helped significantly by the $10,000 or so in funding they’re going to receive, and we have strict standards that they must comply with to be eligible.