27 October 2014

A closer look at the "Disabled Veterans National Foundation" - Updated x2


This elaborate "desk set" (calculator, pen, note pad) arrived unsolicited in the mail this week, from the Disabled Veterans National Foundation.  Because our family does donate money to charities, and because I know they exchange (or sell) names of donors to one another, I'm never surprised when new appeals arrive in the mail.

But this one was fancier by a couple log powers than anything I had ever seen before.   Even more elaborate than the made-in-China pseudo-Native-American-craft dreamcatcher I blogged two years ago.  Most charities simply send return-address labels.

So I decided to investigate.  My first stop was Charity Navigator, an unbiased resource for those who wish to give to charities.  Unfortunately, this was their response: "We don't evaluate Disabled Veterans National Foundation. Why not? We require 4 years of Forms 990 to complete an evaluation."

So I looked at the evaluation at Charity Watch:
Claims made about the percentage of donations going to charity are not the only contradictions AIP found when investigating DVNF. "For 35 years we have been putting service to others before ourselves," says one DVNF solicitation. This is an interesting statement considering the charity was not incorporated until November 2007, according to its 2008 tax form...

According to that AIP member, DVNF first sent a large plastic envelope containing a calculator and planner which she had not requested, along with a contribution form. They later sent her a follow-up solicitation asking "Did you receive the Patriotic Calculator and Planner Set I sent you?" This statement was printed in red letters above her name and address on the envelope next to a photo of an injured soldier being carried into a helicopter on a stretcher. Charities that mail unrequested gifts while at the same time requesting contributions are trying to guilt you into giving, in AIP's opinion. Donors should be aware that they are under no legal or, for that matter, moral obligation to send contributions in response to gifts they have not requested...

The language in this solicitation could lead potential donors to believe that the charity seeks funds primarily for direct assistance to veterans, which is not the case. According to DVNF's 2008 audit, only $127,421 or less than 1% of DVNF's $16.3 million budget could have been spent on grants or aid to individuals. Except for this amount and a $40,000 unrestricted grant to a related party, all the rest of DVNF's reported program expenses of $4.5 million were direct mail related.
In fairness, I'll note this evaluation was posted in August of 2010, so there may be newer data.  But I'll give this one a pass.

Update:  I wrote the above on April 30.  Yesterday, as predicted, the followup request arrives, not as an "invoice," but as a "receipt verification form." The reply form reads "YES! I received the calculator and 14 month planner.  I want to honor the disabled American heroies whokeep our nation safe!  To help these courageous men and women get the respect & benefits their military service earned, here's my gift of..."

Also, a tip of the hat to reader Corey, who notes that on May 8 CNN addressed this issue:
A national charity that vows to help disabled veterans and their families has spent tens of millions on marketing services, all the while doling out massive amounts of candy, hand sanitizer bottles and many other unnecessary items to veteran aid groups, according to a CNN investigation.

The Disabled Veterans National Foundation, based in Washington, D.C., and founded in 2007, received about $55.9 million in donations since it began operations in 2007, according to publicly available IRS 990 forms.

Yet according to the DVNF's tax filings with the IRS, almost none of that money has wound up in the hands of American veterans.

Instead, the charity made significant payments to Quadriga Art LLC, which owns two direct-mail fundraising companies hired by the DVNF to help garner donations, according to publicly available IRS 990 forms...

DVNF specifically cited a small veterans charity called St. Benedict's. But the charity's executive director said most of the donations from DVNF could hardly be classified as "badly needed."

"They sent us 2,600 bags of cough drops and 2,200 little bottles of sanitizer," J.D. Simpson told CNN. "And the great thing was, they sent us 11,520 bags of coconut M&M's. And we didn't have a lot of use for 11,520 bags of coconut M&M's... "

In one instance, the DVNF claimed more than $838,000 in fair market value donations to a small charity called US Vets in Prescott, Arizona. CNN obtained the bill of lading for that shipment, which showed that, among other things, hundreds of chefs coats and aprons were included in the delivery, along with a needlepoint design pillowcase and cans of acrylic paint. The goods listed in the two-page shipping document were things "we don't need," a US Vets spokesman said. 
More at the link. Many "charities" that ask for your money use a similar ploy.  They request free items from corporations - "gifts in kind" - then declare an inflated "market value" of those gifts when they give them away, which they use to offset the cash contributions they get from you.  The corporations in turn, of course, declare some value for these "gifts in kind" to deduct on their state and federal tax statements as charitable contributions to lower their taxes.

In May, Anderson Cooper posted this video report: [has undergone linkrot since 2012]

I spent the better part of 20 years of my working life serving U.S. veterans, so I have a personal interest in seeing that this particular story gets the attention it needs.

Addendum:  As Dan F. notes, the group is now going to be the subject of a Senate investigation.

Addendum #2:  Reposted from 2012 because the most recent comment from a reader indicates that this group is still in business.  The Senate inquiry apparently resulted in a monetary fine (and a promise to reform). 

40 comments:

  1. They're trying to fake people into thingking they are the DAV. Thank you for posting this.

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    Replies
    1. September 2016: Still in business. Received calculator and a pad with a pen in a vinyl binder plus a small "redundantly put together" planner that is not conveniently functional at all.

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    2. September 2016: DVNF is still in business. Forgot to say in the previous "reply" that the DVNF also included a $2.50 check for me to cash, along with the binder that holds the calculator, notepad, pen and a non-functional planner. That's right...Now they are giving away money!

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  2. When I receive unsolicited items from charities asking for money, I donate them to either Goodwill or Salvation Army. Hopefully, someone will benefit in some small way from this.

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    Replies
    1. Do research on good will.....just a name and they give nothing, to the needy, or poor

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  3. Jerry in and around DallasApril 30, 2012 at 3:53 PM

    My wife got one of those DVNF sets recently in the mail She liked the calculator, but unfortunately it was defective. The "8" key, when punched, would give only a "6." We ditched it.

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  4. Who cares if it works- it's... Patriotic!!!

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  5. I got a solicitation with the identical "gifts" from an entirely different organization. I didn't bother to check it out. I put everything back in the huge envelpe, marked it "REFUSED," and gave it back to the mail carrier. I just find that kind of thing insulting.

    While I'm on the subject, it annoys the living daylights out of me that I can't make a one-time modest contribution to a group for some special cause without having that contribution quickly used up by dozens of fancy mailings.

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  6. Gee, all I get are address labels (more address labels than I can use in this lifetime) and the occasional nickel or dime.

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  7. Thanks for this post, minnesotastan. I contribute to various non-profits, and over the years find myself becoming increasingly irritated by their gimmicky come-ons and, as you say, "guilt" trips with mailed items that really have no use for me.

    I do think the Humane Society of the United States is one of the worst offenders. I am constantly bombarded with blankets, gloves, watches, tote bags, tee shirts, etc. because I donate from time to time. How much of this cost to make these items (albeit cheaply produced, somewhat shoddy merchandise) would better benefit the animals? In fact, I have told them to stop sending me things I don't need, please take those couple of dollars they would have spent mailing me things and use it for their mission purposes. Then somehow they got hold of my phone number. They called incessantly until, much to my reluctance, I had to tell them to place me on their do-not-call list. I do appreciate their work, I believe they are a worthy charity, and I know they do much good. But there is so much waste that goes on, it is unbelievable. STOP SENDING ME STUFF! The blankets I give to the local animal shelter (which I also support) and the rest of the stuff goes to other charities, as Cathy M suggests.

    CharityNavigator is an excellent site, and Anonymous is correct about the DVNF trying to pass themselves off as the DAV, or akin to the DAV. I believe they hope people won't notice. I believe they hope people aren't aware of CharityNavigator.

    People, use your money wisely. Check out all non-profits before donating any money. Locally, your talents are likely better put to work through volunteering your time, materials and talents to area non-profits. Animal shelters can use old towels, newspapers, blankets, food. Homeless shelters can use time, food, blankets, toiletries. The list goes on. It is very likely your neighbor would appreciate your donation of time and materials so much more than a questionable national "charity" that solicits you from out of the blue.

    Sorry to ramble, that's just my thoughts and experiences.

    ReplyDelete
    Replies
    1. You might want to check out the Humane Society of the United States (HSUS) before you give them money for shelters and animal rescue. They are a political organization rather than a rescue group. You'd be better off donating to your local shelter.

      http://activistcash.com/organization_overview.cfm/o/136-humane-society-of-the-united-states

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    2. Sugar Magnolia:

      You are correct about the HSUS but not about Charity Navigator.
      CN rates 6000+ charities and doesn't bother to look beyond charities' self-reported fundraising expenses on Page 1. HSUS and other D and F rated groups exploit this ineptitude by cooking the books, categorizing all those guilt gifts as "program expenses" on their tax returns. Charity Navigator rewards them for this deceit with a four star rating. HSUS touts this rating in their relentless mailings begging for money to rescue animals (they do not) and online pitches. Charity Navigator routinely rewards
      disgusting charities like Feed the Children, which imploded in disgrace last year. Four stars also for the East Asian Institute, the subject of a recent 60 Minutes expose and a just settled $1 million lawsuit with the Montana Attorney General. Countless millions of dollars were extracted from donors to the above - and many more - scam "charities" thanks to Charity Navigator's incompetence and undeserved self-crafted image as a serious watchdog.

      P.S. D rated HSUS uses the same direct mail firm as DVNF, Quadriga, which threatened to sue the CNN reporters for asking questions. Classy.
      Charity Watch is as great as Charity Navigator is terrible. I encourage people to complain to Charity Navigator and urge them to evaluate large charities and groups with questionable reputations more extensively than tiny groups with tiny budgets. Their methodology is pathetic. They don't even take the online comments into consideration before granting 4 stars to frauds like HSUS. HSUS has received comments like yours for 5 years). CN gives mediocre ratings to some of the best charities, organizations that are guilty of...filing honest IRS forms.

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  8. You could always put the calculator in the post paid envelope they enclose and mail it back. That way you stick them for the overweight postage too!

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    Replies
    1. Their return envelope was not post-paid. You have to put on your own stamps.

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    2. You CAN refuse mail so that it's returned to the sender at no cost to you. It wouldn't work in this case because the mail was opened, but for any future DVNF mailings:

      -leave the envelope sealed
      -write "REFUSED" on the front
      -put it back in the mailbox

      Maybe they'll get the hint and take you off their list.

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  9. I presume this is driven by aggressive people displaced from the banking sector? The sort who would have been selling sub-prime mortgages are now persuading charities good and bad to part with a slice in exchange for promises to outperform "the market". Sounds familiar.

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    Replies
    1. You are correct. Many former fired (and even convicted) bankers and lawyers have joined the charity fundraising industry, where they are welcomed with open arms. That's another reason why for-profit, commercial fundraising vendors need to be regulated like the businesses they are. Hiding behind charity free speech loopholes and exploiting the lack of enforcement of existing rules has got to end.

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  10. At least it's keeping the post office in business. The worst is when you donate, then spend the next five years answering telephone calls from the company they hire to call you up every two days begging for more.

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  11. just saw an article on this on CNN http://www.cnn.com/2012/05/07/us/veterans-charity-fraud/?hpt=hp_c1

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    Replies
    1. Wow. I need to add that on as an addendum - after I get my garden work and butterfly hike done today.

      Thanks, anonymous

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    2. me again, it gets weirder http://www.cnn.com/video/?hpt=hp_t2#/video/us/2012/05/10/ac-drew-griffin-careless-whisper-dvnf-response.cnn

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    3. I've updated the post. Thanks for the heads-up, Corey.

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  12. This type of deceit makes me angry. It makes the work of real charities that much more difficult. First, it causes them to be viewed with suspicion. Second, these hoodwinkers siphon money from legitimate organizations.

    The only positive I see is that stories like this could cause people to be more cautious in their charitable giving. Charitable giving should be reasonably done, and not simply an emotionally driven event. If we are thoughtful and emotionally invested, we will be more likely to be of long-term use to a worthy cause.

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  13. We got cases of those coconut M&Ms donated to my church's food bank. The company is giving them away by the ton (they're not very good), so you can bet this charity got them free.

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  14. I got the same pile of crap from the ASPCA. I will only honor email solicitations. I don't want my charity $s to pay for stuff that nobody wants. Thanks for the tip about refusing the mail, andiscandis. I plan to put that into effect PDQ.

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  15. I've found the best thing to do is just donate to your local charities, that way your helping out your community. I'm sorry to say another one is St. Jude's Hospital. Once you give to them they keep nagging you every month. I finally ended up writing them and telling them off. I haven't received anything since. I won't donate to the Red Cross either the money goes to their top executives. So give to the Salvation Army. It's ashame that charities have turned into scamming people out of their money, especially the veterans who will not have a normal life again.

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  16. It looks like the media coverage has drawn the attention of the Senate:

    http://www.accountingtoday.com/news/Senate-Probes-Tax-Exempt-Disabled-Veterans-Group-62769-1.html

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    Replies
    1. Thanks, Dan. I've appended that info to the post.

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  17. I have wondered about the DVNF. I got a calander/planner and ink pen and sent them the minimum donation. Then I got a calculator and another planner and pen. I noticed they were made in China. I got a pair of gloves and saw they were made in China. I have not sent any more money to them. I got a belt buckle today, but it is not marked where it was made. I am a member of the American Legion and donate to them and to PVA, but have sent them both notes asking to not send any more address labels since we have enough to last a few years. Thanks for all the info.

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  18. Oct 20, 2014, I received from DVNF a beautiful large, solar powered calculator, large number keypay, large number display, with my name inscribed on it. Also, the calculator was in a leather look-alike folder carrier. Inside was a pad of paper with patriotic borders and my name on it. Also a pen. Also, a 14 month day planer with my name on it. AND, a valid check made out to me for $2.50. (which I am going to cash). This outfit is a fraud. I served 37 years in the military. When is the Justice Department and the IRS going to investigate this foundation? The IRS can investigate all the Tea Party Groups across the entire nation, but not this fraud of the system. When is the IRS going to revoke their 501.(c) 3 status? The State of New York sued them and won a settlement of $75,000,000.00 (yes, 75 Million Dollars). The Senate investigation was in May of 2012. This is 2014. Was their an investigation???

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  19. You have been boingboinged :) Does that still have the impact it used to have? http://boingboing.net/2014/10/27/unsolicited-gift-from-disabled.html

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    1. I checked the metrics this morning; traffic increased yesterday from the usual 3,000 visitors/day to about 4,000. In practical terms this makes no difference because I maintain TYWKIWDBI without advertisements, so the clicks are irrelevant - but you never know when a new visitor will become a regular weekly visitor and contributor with helpful comments or a different insight. So I'm pleased to see traffic bumps every now and then.

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  20. I get this stuff too. I think perhaps it is wrong to be as enraged about this as I am. I just think that the sort of person who profits from a fake charity is irredeemable scum. They steal from the donor, as the money is not going where they claim it is. They steal from the disabled vets, because that money would otherwise go to a real charity. If I had access to these fraudsters, I would probably do something terrible.

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  21. I'm glad to learn about HSUS. I care about animals, and want to give where it will do the most good to help them. And this year I have been so bombarded by emails from everybody from the Obamas (separately) to dozens of people running for state offices. I have limited funds, and only give to local candidates or national candidates such as president or senator. Thjese emails make me want to quit giving anything to anybody.

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  22. yes I like the candidates letters, typically 4-5 pages, that tell you what we need to do to save our country, then ask you for 1,000, 500.00, 250.00 100.00, or 50.00, all in one sentence. Then they intersperse more text with the same sentence with dollar amounts over and over to the end of the letter, as though they need to ask you 5 times, like we are all stupid.

    thanks so much for the info on this so-called veterans org, I got a desk set and a 2.50 check today;, was bothered by the resources spent on this 'gift' and started seeking info online about them. Thanks a bunch--

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  23. This and other "we trust you, trust us" charities attempt to profit from your conscience in your feeling guilty for keeping what you didn't pay for. Cashing the $2.50 check could be considered larceny; like they would do legal action over $2 and change? But shred it and give the goods away or reseal it as it came, refuse/return via mail; sticking them with PO charges and the goods.

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  24. And the scam is still going on in 2016!! Today I received the large envelope with the calculator, etc in it. I had never received mail from them before and have no idea how they got my name. As soon as I read their message, I came to the computer to check on them as it smelled "fishy" to me! It made me angry to think people could be so low and so greedy. My husband was in the Navy Air Force for six years, being there before, during and after WW2 and including 18 months in the S. Pacific supporting and protecting our Navy from the Japs. He passed on in 2014, and I think these vultures desecrate his and other veterans' memory. They will get nothing from me.

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  25. Just received a large envelope from DVNF containing a Bank of America check made out to me, a fancy tee shirt and a tote bag. Letter included assured the check was good and asked for a $25 donation. I'm endorsing the check to the Salvation Army and donating the tee shirt and tote to their charity drive!

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  26. Thanks for your blog. This morning in 2016 Sept, I got the same package of calculator,pen,pocket book. I too wonder what this organization is. Look over internet and not good charity. I will not make any donation as I usu. do. Thanks for raising alert to us so that we don't fall prey to those opportunists and can give help to those needed. Thanks.

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