The Reynolds "Charity" Empire in Decline

A few years ago I wrote a post entitled, "Is The Breast Cancer Society a Worthy Charity", to which the answer was "No". The comments to that thread are extensive, and include a defense of the organization from Kristina Hixson, which avoided answering any of the tough questions or giving an honest explanation of the organization's operations. She went so far as to post a series of fake endorsements to the thread, trying to bury valid criticism behind fictitious praise.

Oh yes, and she went on to marry the man who ran that "charity", James T. Reynolds II.

Over time, the Reynolds' family of "charities" started to receive press scrutiny. The Tampa Bay Times published an article, "Intricate family connections bind several of America's worst charities". It opens

Carol Smith still gets angry when she remembers the box that arrived by mail for her dying husband.

Cancer Fund of America sent it when he was diagnosed with lung cancer six years ago.

Smith had called the charity for help. "It was filled with paper plates, cups, napkins and kids' toys," the 67-year-old Knoxville, Tenn., resident said.

"My husband looked like somebody slapped him in the face. "I just threw it in the trash."

The story continues,

In the past three years alone, Cancer Fund and its associated charities raised $110 million. The charities paid more than $75 million of that to solicitors. Cancer Fund ranks second on the Times/CIR list of America's worst charities. (Florida's Kids Wish Network placed first.)

Salaries in 2011 topped $8 million — 13 times more than patients received in cash. Nearly $1 million went to Reynolds family members.

The network's programs are overstated at best. Some have been fabricated.

The Federal Government has finally managed to partially shut down the Reynolds empire:

In reality, officials say, millions of dollars raised by four “sham charities” [Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society] lined the pockets of the groups’ founders and their family members, paying for cars, luxury cruises, and all-expense paid trips to Disney World for charity board members.

The 148-page fraud lawsuit accuses the charities of ripping off donors nationwide to the tune of $187 million from 2008 to 2012 in a scheme one federal official called “egregious” and “appalling.”...

Among the allegations is that [Reynolds' ex-wife, Rose] Perkins gave 10% across-the-board bonuses twice a year to employees [of the Children’s Cancer Fund of America], regardless of performance, and was allowed to set her own salary and bonuses up to a limit without the approval of board members. In 2010, when donations to the Breast Cancer Society were declining, Reynolds II’s salary ballooned from $257,642 to $370,951, according to the complaint.

What can a grifter do, but grift? Even having been shut down, the Breast Cancer Society promises to come back to leach off of the good intentions of people who want to help cancer survivors:

The silver lining in all of this is that the organization has the ability to continue operating our most valued and popular program, the Hope Supply. Our Board will work tirelessly to maintain the Hope Supply program services that have benefitted our many patients for years – initially under the TBCS banner as it transitions under a different organization – all with the goal of seamlessly providing services to you. I take solace in the fact that this wonderful program has the chance to continue operating.

There is a note of honesty, "I have loved leading TBCS...." Why wouldn't James love working in a job that paid him royally for performing little work, despite his indifference to the needs of the people his charity was supposed to help? It's a gravy train he's eager to re-board, so watch out for his next "charity", coming soon to a list of the nation's worst charities near you.

If you want a good measure of James Reynolds II's character, watch him on video.

Sorry, I No Longer Donate Over the Phone

A couple of years ago I wrote about my experience with a fund raiser for The Breast Cancer Society, and the behavior of their representative in my comment thread has not softened my views on the organization. But alas, even if I'm contacted by a worthy charity, my present response is going to be, "Sorry, I no longer donate over the phone. Please remove my name and number from your list."

Why? Three basic reasons:

1. I Don't Like the Interruption: When I'm working, eating dinner with my family, relaxing, I don't need the phone to be ringing with somebody asking for money.

2. It's Probably Not the Actual Charity: Very often the person making the call is working for a professional fund raising outfit that may be taking 80% or more of the money raised. When that happens, I can hang up the phone, go on line, and give directly to the charity - and the charity ends up with a lot more money.

3. Fraud is On the Rise: We've seen any number of "sound alike" charities arise, using names similar to established, quality charities in order to elicit contributions from confused donors. But we are now seeing overseas phone banks set up, pretending to be actual charities, soliciting donations by credit card and then using the credit card numbers to engage in fraudulent purchases.

By saying "I don't give over the phone", I get time to investigate a charity, donate directly to the charity if I find it to be worthwhile, preserve my donation for a better cause or charity if I find it is not, and avoid any possibility that the person on the other end of the phone line is actually trying to steal my credit card information.

Is "The Breast Cancer Society" a Worthy Charity

I received a solicitation phone call from "The Breast Cancer Society", or more correctly from a phone bank they use to solicit donations, presumably because I have donated to other breast cancer charities in the past year. The phone bank had a decent script, concise and designed to inspire emotion with a dose of guilt at the end ("can the children count on you"), although I have to assume that the last line got crossed with the final appeal for another of the phone bank's charities.

I am always skeptical of donating money to charities through a phone bank, because the costs of those fundraising programs are so high. The phone bank takes a significant cut, from what I've heard between 40% and 90%. They also want a decision "now, now, now", diminishing your opportunity to figure out if they're a legitimate charity or a sound-alike charity - a charity that has picked a name that sounds a lot like a bona fide charity, but which has neither the integrity nor the track record of the charity from which their name is derived.

While on the phone I tried looking up "The Breast Cancer Society" in Charity Navigator. No dice. So I told the woman on the phone to call back later after I had a chance to investigate "The Breast Cancer Society" and figure out why it wasn't on Charity Navigator.

The answer to that last question is pretty simple. It's too new. The Breast Cancer Society doesn't have the necessary history of Form 990 filings with the IRS to support an entry in Charity Navigator. But wait a second... There's the Cancer Fund of America, run by the same people, which has a poor overall rating. The BBB has this to say:

Cancer Fund of America solicits donations across the U. S., including locally, through telemarketers, direct mail and online. The BBB found that more than 99 percent of all cash donations to the organization pay professional fundraising costs, salaries for charity officials, consultant fees and other expenses related to the charity’s operations.

* * *

Cancer Fund of America and a related support group, Cancer Fund of America Support Services, Inc., reported they raised slightly more than $17 million in 2007, the most recent year in which public information is available. Of that total, Cancer Fund of America reported it donated $54,000 in cash to unrelated groups or individuals – or about 3/10 of 1 percent. Of that $54,000, however, $50,000 went to a court directed cancer charity as part of a settlement with the Georgia Governor’s Office of Consumer Affairs. The state alleged the charity gave out deceptive and misleading solicitations to consumers.

The salaries and benefit packages for charity president James T. Reynolds, Sr., two sons and a son-in-law totaled more than $537,000 for the same period.

The charity responded to the BBB that, having raised $17 million in cash donations and $5.8 million in non-cash donations in 2007, it should get credit for the "$3.3 million in non-cash donations the charity gave to individuals and other organizations in 2007."

However, several of the organizations listed in the charity’s federal report appear to have little direct connection with cancer causes.

A spokesperson for Angelic Ministries, an organization that works with the poor in the Knoxville region, said it receives “oodles” of items from Cancer Fund of America. Cancer Fund of America reported it gave about $317,000 in donated items to the ministry in 2007, and the spokesperson said much of that was over-the-counter pain and cold medications. She said about half the drug items were expired, but usually only by a few months, and the drugs remained effective.

Cancer Fund of America also reported giving nearly $230,000 in donated items to Trinity Rescue Mission of Jacksonville, Fla. A spokesperson there said that organization deals largely with the homeless and not specifically with cancer patients. She said she had no record of ever receiving any donations from Cancer Fund of America, although she said the items could have come through another organization. Reynolds failed to respond when asked specifically about the rescue mission donation.

The article provides further detail on the organization's management, expenses, and activities. In terms of related organizations:

Also, Federal records show Cancer Fund of America Support Services, Inc. received slightly less than $8.2 million in cash donations in 2007. That organization’s only outgoing grant was for $750,000 – to Cancer Fund of America. The report says its fundraising expenses totaled about $6.1 million. James T. Reynolds Jr., a son of James T. Reynolds Sr., is listed as president of the support group.

Rose Perkins, who formerly worked with her husband, Reynolds Sr., at Cancer Fund of America, left that organization several years ago and currently heads Children’s Cancer Fund of America of Powell, Tenn. Records show that Children’s Cancer Fund of America received about $5.4 million in cash donations and $2.2 million in non-cash donations in 2007. She reported direct cash to patients at about $382,000, or about 7 cents of every $1.00 raised. Fundraising expenses were reported at nearly $6.3 million, with $3.4 million going to Associated Community Services.

Perhaps that's the organization whose script was crossed with The Breast Cancer Society's, as that would explain why I was asked if the children could count on me.

Recent news accounts say that James T. Reynolds Jr. recently became head of yet another cancer organization, this one in Mesa, Ariz., and called The Breast Cancer Society. That charity has not operated long enough to file a federal report with the IRS.

Charity Navigator highlights this family of charities on its list of "10 Non-Profits That Make Ebenezer Proud"

Cancer Fund of America Support Services & Children's Cancer Fund of America

Both of these organizations are affiliated with the 0-star Cancer Fund of America. All three are run by one family - James Reynolds Sr., James Reynolds Jr. (son of James Reynolds Sr.), Joshua Loveless (son-in-law to James Reynolds Sr.), Claudette Perkins (sister-in-law to James Reynolds Sr. and sister to Rose Perkins) and Michael Reynolds (son of James Reynolds Sr.). According to their most recently filed Forms 990, both the Cancer Fund of America Support Services and the Children's Cancer Fund of America spent at least 85% of their budgets on fundraising and just 11% on programs and services.

Are you surprised that, after I instructed them that I would investigate them before making a donation, I have not heard back?

Update: