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Tonight on AC360: Charity Cheats?
July 3rd, 2012
02:02 PM ET

Tonight on AC360: Charity Cheats?

When you open your heart and wallet to help a charity, how do you know your money will be put to good use? Tonight we'll bring you a special investigation into charities accused of collecting millions of dollars in donations and not spending it where donors expected.

One of the charities under scrutiny is the Disabled Veterans National Foundation or DVNF. CNN's Drew Griffin discovered there is no sign any of DVNF's cash donations of about $56 million over three years went directly to veterans. Not one dime. Due to CNN's reporting, the Senate Finance Committee is demanding answers from DVNF. The committee is requesting records relating to their fundraising and marketing activities to see if the foundation abused its tax-exempt non-profit status.

Drew tried to get a response from the president of the group, but she slammed a door in his face. So, we tracked down the vice president. You'll hear what she has to say about where all the money is going tonight on the program.

What's remarkable is the Disabled Veterans National Foundation is not the only charity Drew's been highlighting. He's also uncovered another vets group and even one that helps animals called SPCA International. Its signature program is called "Baghdad Pups." They've raised millions to reunite military dogs with U.S. troops and others who serve overseas, but as far as we can tell they don't do that at all.

Of all the charities we've been digging into, they all have one thing in common. All have connections to the fundraising company Quadriga Art, which essentially gets paid to build mailing lists for the charity groups. You'll see what Drew uncovered when he followed the money trail.

We'll also give you tips on what to look for to make sure you're donating to a charity with a good record. Join us for our special investigation tonight at 8 and 10 p.m. ET.

soundoff (40 Responses)
  1. Craig Moore

    Quadriga Arts should be posted on every charity form so people know that most of their money is going into their pockets not the charity. This should be a law

    July 8, 2012 at 2:13 am |
  2. Kimberly R

    I found this news story about Charity Cheats needed but so sad. As a supporter of animal rights and someone who gives to rescue groups that help pets I was heartbroken to see that they lied about taking care of these animals. The millions of dollars could have saved so many lives. It's like taking food from a starving baby. You can't do that and have a soul. I give to mostly local animal rescue groups, so I can see where the money is going. There is one group called "The Puppy Rescue Mission" that helps bring dogs home for our troops from war areas. They have pictures, detailed stories, and follow-ups. If your going to do a list of good animal charities that help dogs/cats and American troops then I think The Puppy Rescue Mission should be on there.

    July 8, 2012 at 2:04 am |
  3. Ken

    Sadly, this is a pressing issue that has only grown under the economic struggles. I got the impression that some of the organizations, while ill-intentioned, failed miserably in doing their due diligence and/or managing their organizations (e.g. reading and understanding contractual agreements prior to entering into them). Though horrible, it is not as despicable as those that use the excess contributions to pad exorbinant salaries.

    With the volume of misrepresentations crafted under Quardriga Art's 'strategies', I'd have to presume there have been some substantive criminal and civil violations in regards to fraud. Though I don't have a legal background, it would appear to me there may be some recourse and clearly defined damages should deceived donors be brought together by – say for instance – a national media program.

    July 7, 2012 at 3:05 am |
  4. Lori Cote

    I'm from Montreal, and what your story failed to mention is Barnotti was the head of the Montreal SPCA til he was ousted after accustaions of misappropriating funds donated to the animals, for his own gain.
    This man should NEVER have been able to serve on another charity let alone RUN ONE!!!!!
    I am mortified that our laws are this weak, and that our lawmakers care so little..............
    Shame on you Canada

    July 6, 2012 at 10:09 pm |
  5. simon akis

    thank you cnn
    for showing the fraud that is going on with the charities. i will never again give any money to any charity because i see that they take the money for them selfs. thank you Anderso cooper

    July 6, 2012 at 8:28 pm |
    • Sher

      Simon (and others who are incensed – as am I!)... we can't let a few bad apples spoil the lot!!! Govt. can't save EVERYONE (esp. govts. from countries like Haiti, e.g.).

      I think the purpose of Anderson's report wasn't that we should stop giving; just that we should be informed and aware.

      I am certainly not "holier than thou" – I should give more, probably, BUT I don't want the thought of a charity "gone wrong" to stop me from giving to many WONDERFUL charities.

      A Little given by a LOT can really make a difference. And has.

      July 7, 2012 at 10:18 am |
    • Ali Haqqani

      Thanks for the program. I have been regularly sending money to one or the other. No more now. But please show us some genuine ones.

      July 7, 2012 at 8:33 pm |
    • Bethany

      To each their own, but that is not the point of this investigation isn't to be miserly, but to research thoroughly into the charities you want to donate to. Non-profits take work to run, but at the end of the day they should be upholding a mission that makes a positive change in the community, the environment, or for others. Imagine if people didn't give to food banks or homeless shelters or animal shelters or churches. Research is the key.

      July 9, 2012 at 8:11 pm |
  6. Chris St Charles

    I just received an email back from SPCA Intl. They actually have the balls to deny the report on them on 360!! Please forward me an email address so that I can send you my correspondence with them.

    July 5, 2012 at 2:30 pm |
  7. Craig

    There is a charity that I do wonder if it is legit, "The United States War Dogs Association, Inc." Anything, anyone knows would be valuable. At E-bay when I made a purchase I was told that 10% of my total amount was donated to this charity. Please let everyone know, too. Thanks!

    July 5, 2012 at 12:39 am |
  8. Richard Ellenberger

    As a Marine Vietnam Veteran, I have always tried to financially help different Veteran oranizations with what I could afford. It turned into so many different groups I lost track of the number. It was only with my viewing CNN's program "Charity Cheats" that I realized that I'd already been stung once by one of CNN's focus "Vet" groups, Disabled Veterans National Foundation and had just been contacted again by DVNF for another sting. It was a close call. Thanks, CNN.

    July 4, 2012 at 2:28 pm |
  9. Michael

    Can you please advise again which watchdog group rates charities? I would like to donate to a veterans cause and would like to find out which ones are the best ones.

    July 4, 2012 at 12:02 pm |
  10. David

    I hope that they are also looking into the Humane Society of the United States. Apparently less than 1% of donations to them go towards animal shelters and helping animals through spay/neuter programs etc.

    July 4, 2012 at 10:26 am |
  11. Norm

    Thank you for this program. I am a veteran and have been sending donations for the past few years to this same organization – even have one of the calculators displayed with the American flag and my name. What a rip off! $56 million dollars and nothibg of real value to the disabled vets. What is sad is that there are many organizations that try to help people and communities that are too often taken advatage of.

    I also belong to a volunteer fire department in a rural Wisconsin community – we have been holding a corvette raffle for 28 years and we were just audited by the state and told what we do is illegal and must stop our main fund raiser.
    All monies raised are directly used for the fire department – honest expenses and saved to buy our fire trucks and equipment but now because of some state and federal laws some going back to the 1800s, We are told to stop – but these crooks have operated this way for years making millions. Doesn't make much sense.

    July 4, 2012 at 10:11 am |
  12. lorie goldstein

    Saw your show....very informative. ....thank you for the information.
    Enjoy watching Anderson all the time.

    July 4, 2012 at 9:27 am |
  13. Stef

    The answer is to donate locally to non-profits in your community that you see making a difference. If you are still concerned, ear mark your donation for a specific cause within that non-profit. Donate to your local humane society by sponsoring a dog or ear-marking it for vet bills. If it is a substantial donation, meet with the board and see if you can use that donation to end their use of gas chambers or heart sticking and switch over to a humane means of euthanasia. As the manager of a no-kill shelter, I can tell you that we see not a single dime of what goes to most of the big animal charities you see on TV; and it is us who have boots on the ground and are literally saving lives.

    July 4, 2012 at 8:28 am |
    • Lori Cote

      Barnotti used to run our local SPCA in Montreal. Donating to local charities is no guarantee. You have to look very closely, and just hope your local authorites are on the ball.........

      July 6, 2012 at 10:11 pm |
    • Bethany

      Thank you, Steph. Hit the nail on the head.

      July 9, 2012 at 8:14 pm |
  14. Doug Kennedy

    I hope Anderson reads this. I feel his coverage of non-profits was way overdue. There are few that spend anywhere near the money they collect on their so called "missions". While I was happy to see him cover this increasingly corrupt use of the 501 (c3) status, what surprised me the most is that neither Anderson nor his two quests from watchdog organizations mentioned IRS Form 990.

    I belong to Guidestar and I was appalled that even its representative failed to mention that the IRS form 990 which all non-profits are required to furnish the public is offered to Guidestar users for free. These form 990s are the single most revealing source of of information on activities of all non-profits and we download at least a thousand per year in our research. What we find with almost all non-profits, be they (c3) or (c4) is disturbingly revealing. High salaires for officers and very small expenditures towards their mission. In fact many well known non-profits spend more money on accounting and investing the money they get (investment broker fees) than they do on their missions. And the benefit packages for executives at these slimy organizations are obscene. Please let the public know of the form 990 and encourage them to go to Guidestar to find any charity they have questions about and download each of their 990s. You will be shocked!

    Doug

    July 4, 2012 at 5:57 am |
  15. Dean Graham

    Anderson, you have not even scratched the surface of non-proftis using the military to fund their very profitable businesses. Wounded Warriors and many other like them are the biggest offenders. They all hde behind their smoke and mirrors financial statements. I am a disabled Iraq Veteran and I called them saying that I am a veterans and I need to keep my lights on. I talked to five different (non-miliitary employees) each tried to collect a donation from me and then said they do not help financially for veterans. There board of directors is full of former Veterans Admiinistration officials who have created this network of ways to get grants and donations on the backs of Veterans. Please do not stop exposing these for profits that are riding on the backs of veterans who served our great nation. They all should be charged with conspiracy to committ fraud on the backs of our Hero's. I feel sorry for the American public that has been ripped off but I am more sorry for the 1 million veterans who are still waiting for compensation and pension decissions from the very Veterans Administration who is giving out grants like candy to former employees.

    July 4, 2012 at 2:28 am |
  16. Marilyn Montgomery

    During the broadcast, Drew mentioned a non-profit rating agency. Can you tell me what their name and website address is?

    Thank you

    July 4, 2012 at 1:21 am |
  17. Harold Sims

    How do I list my charity so people looking for a charity to donate to can find me? Or that people can use to check my out?

    July 4, 2012 at 12:18 am |
  18. mollie

    Great work on exposing the truth about charities tonight!!! I wish you would investigate and inform the public about the HSUS.

    July 3, 2012 at 11:44 pm |
  19. shawn dillon

    All I can say is wow to this. I can't believe that somebody would create a group like this. As a Iraq veteran myself I think that this company should be taken to court and tried under the the stolen valor act. I know this isn't a stolen valor and there not wearing medals but this is right up there with it. What these people have done and the "president" is a joke and should have to pay all 56 million dollars back to real veteran groups that actually helps vets that have a disability or give it to the VA and let them use it to help veterans.

    July 3, 2012 at 11:42 pm |
  20. Myra

    There are thousands of charaties doing great work around the world. Why not have a program that highlights both charities that are cheats and those that are not? Why not talk about how charities are under more scrutiny and accountability than the government? Primarily because if you don't like how a charity is spending your money you can stop giving. Don't like how waste and fraud in government is squandering trillions of your hard earned money? Try to stop paying your taxes and see what happens to you. At the end of the day, you are better off having more money that YOU can choose to give or not to charity even if once and a while you get swindled than being forced to give to big, unaccountable, non-transparent government whether you want to or not.

    July 3, 2012 at 11:17 pm |
  21. garfield t brown jr

    Go after them for wire fraud. The sorry woman on your show is all the above.Anderson.How can she not know where the money goes.; She gets her bank statement every month. Let the men that run the vet.home in alabama know that i thank them for there hard work. If you or your hard working reporters who blowed the lid of this story Stops in Scottsboro Alabama.. I would like to buy you a round of drinks I am in the phone book. .I spent 20 years in the military. This is the thanks we get. Military fakers taking contracts from Vets.Fake charities stealing money from every one. It makes. you ask why should i do this job?. Trevelyn Brown

    July 3, 2012 at 11:10 pm |
  22. Candice

    Please know that Terri Crisp has been long gone from Noah's Wish for many years now. What she did to that group and the dedicated volunteers is shameful, and the group is still trying to overcome all the bad press she brought to us. I was at Katrina with Noahs Wish for over 3 weeks. I did intake and paperwork to keep track of all the animals because I am in a wheelchair. In know for a fact we saved a LOT of animals during that time. We are still saving animals. I hat5e to see a group of good folks be tarred and feathered all these years later because of what Terri did. If someone had a right to be angry it would be me. A quilt I made out of bandanas worn by volunteers during Katrina was raffled off and raised over 20,000 dollars. The money was to be put aside to pay expenses for volunteers ton travel and respond. We spend our own mo0ney to go to a disaster. Due to Terri's lack of follow through the account was never set up, and there was no paper trail, and it went away in the settlement with the California Attorney general. I am still a volunteer with Noah's Wish, and will continue to be, why punish good people and a good group because one person long ago did bad things. If anything , we are under the scrutiny of the state now and are absolutely on the up and up. Please stop tarring and Featheri8njg the group now.... things are far different, and bashing us now, rather than Terri who deserves the bashing is only hurti9ng the animals.....

    July 3, 2012 at 11:07 pm |
  23. Don Spiegel

    I give money to over 100 different charities every year. I am outraged at the report that all the money raised by the charities are going to Quadriga Arts rather than to the supposed beneficiaries of the charities. Some of these charities send me nickels and dimes, note pads, stockings, children's underwear, calendars, umbrellas, packages of seeds, etc. I know these are ploys to get me to send donations, but I hate that they send stuff to me. They should be using the money they raise to go directly to the intended beneficiaries. Protesting their tactics does no good. I want to know if the charities I support are contracting with Quadriga Arts to assist with fundraising and mailing lists. If I find that they are giving money raised from from donors to Quadriga Arts, I will stop giving money to those charities. CAN YOU PLEASE FIND AND PUBLISH A LIST OF THOSE CHARITIES THAT ARE ASSOCIATED WITH QUADRIGA ARTS? That would be a real public service, so we can help stop this scam. I hate the thought that most or all the money I send to charities is going to Quadriga Arts and NOT to the intended recipients of the charities. I do check with Charity Navigator for their ratings of charity organizations, but they do not list nearly all of the charities out there begging for donations. Also legislation is needed to provide an agency to oversee the operation of these charities. Hate to suggest another big government intervention, but something has to be done to see that the public isn't being scammed by organizations that are either badly managed or are not carrying out the stated goals of the charity.

    July 3, 2012 at 11:03 pm |
  24. Frank

    as a disabled vet i have personally benefited from the charity of those donating to programs like the wounded warrior program, for that help that i have received words cannot express how grateful i am because of those people. the idea though that people would use military personnel to make money like that makes me wonder, it makes me think that those people do not acknowledge what has happened to the men and women who have served in a war zone. or if they do they are of such low character that they dont care. we sacrificed so much some of us gave our lives, some our limbs, some lost their families and some our sanity, the burdens wounds and scars of war come in all shapes and sizes and often are carried throughout a lifetime. many of those i served with feel that what we do helps america despite were we fall in the political spectrum. to be abused like that for gain makes me wonder if all that sacrifice all that loss was wasted on people like that and it makes me very angry. as well i was a military dog handler, they do not leave dogs in in Iraq or Afghanistan. to my knowledge the last time that a military dog was left in a war zone was Vietnam and it caused a lot of vets to push for change which has happened. i was able to adopt the dog i deployed with as have many of the handlers ii worked with. i understand that these type of people are not representative of the majority. i thank cnn for shinning a light on these people please continue to pursue this, it may be that this news report is very shocking for many people ,good, it should be. but understand that it is personal to me, i saw my freinds die i saw the dogs i worked with die. please ido not forget that what is being abused in this instance is not a thing or a right it is people, real people, and real animals, brother sisters fathers sons mothers and daughters and best freinds.

    July 3, 2012 at 11:01 pm |
  25. Linda LeNoir

    While I am pleased that CNN has exposed these charities, I am a bit perplexed as to why CNN did not take responsibility in checking out these dog charities before allowing them to basically advertise the charity on CNN. I am typing this as the last few minutes of your program is ongoing and hope CNN apologized to its viewers for being duped and promises to do a better job of checking out people/charities who appear on your programming, I cannot even imagine how many people gave money to these charities because CNN chose to air/advertise them. As always I am grateful for CNN always gutting up and admitting when they make a mistake but you all were fooled more than once by this charity and its spin offs.

    July 3, 2012 at 11:01 pm |
  26. Sheldon Cooper

    I appreciate any investigative journalism...but an entire episode on a pet charity and not corruption in Congress or corporate America? I can find all I need about any charity in 5 seconds on CharityWatch.org (gives them an F) and
    maybe do a Google search. If you guys are scratching your heads wondering why CNNs ratings are at a 20 year low you might want to dig deeper. BTW, the Better Business Bureau has had payola problems with its grading system.

    July 3, 2012 at 10:54 pm |
  27. Don Spiegel

    I don't understand why you don't investigate Quadriga Arts. Try to get their client list. They they assist fund raising organizations all over the world. They provide all kinds of assistance to the fund raising organizations and furnish mailing lists to be used in contacting potential donors. See where their money is going and what real assistance they give to fund raisers. Quadriga Arts appear to be the main scam artists. They deserve a congressional investigation and an IRS audit.

    July 3, 2012 at 10:41 pm |
  28. Emanuel Whitley

    CNN please make MORE efforts to help people find legitimate charities. We will take your information and spread it all over social media. Give us a list of the bad charities and we'll avoid them also. Help us find a way to help by avoiding these thieves. Please do this. I promise if you compile a list of good/bad the evil people who are stealing will not get another dime!

    July 3, 2012 at 10:32 pm |
  29. Nigel

    Very informative and shocking. But unfortunately that is just one predator that preys on veterans and the family. How about the so called VA affiliated Mortage companies that harass veterans to get them to refinance under Hybrid loans essentially adjustable rate mortgage. I am a retired Army veteran and I am continuously harassed sometimes 4 calls day from Amerigroup claiming they are VA affiliated always pushing the veteran term. Something really need to be done by these companies and charities that are preying on us.

    July 3, 2012 at 10:23 pm |
  30. Kurt

    Want a tip for avoiding charity scams? Don't believe everything you see on CNN or Headline News– even AC360. Producers have a responsibility to vet stories and Anderson's team does a fairly good job of checking on their guests. Do your own homework. Always check what percentage of your gift goes to the charitable purpose and check what percentage is used for administrative costs. While they are not trying to scam viewers, Anderson's staff just wants us to watch the show– always remember you are watching a show.

    July 3, 2012 at 9:50 pm |
  31. Stephen Pearce

    I saw ac 360 on the money that people are giving to all these Charity and it makes me sick to take the money that they are given and spend it on them self and not on our veterans it sucks i think i could do a better job and put where it needs to go and take from all the people that say they are giving to veterans and if any body would help i would like to open a fund and show all those charity's what we could do and do better job we need help our veterns

    July 3, 2012 at 8:34 pm |
  32. Cathy

    I was on board of huge national nonprofit under contract with direct mail provider. When we understood that we were spending >$1 to raise $1, we ultimately sued Russ Reid. This isn't new, even at this $$$ level. My experience was 20+ years ago. Settled out of court. Check the contracts used by these fundraisers! They set up non profit to become dependent on them/non profit boards should have adequate legal sophistication.

    July 3, 2012 at 8:30 pm |
  33. Robin

    thank you for telling us about cheating charities supporting vets. Please now tell us about the honest organizations serving Vets, including US VETS

    July 3, 2012 at 8:24 pm |
    • Ron Stone

      U.S. Vets Honest. I must say they do some good work but they will shortly involved in a scandal that will shock the nation. A Federal court case was settled here in Phoenix by me and other vets for an action not seen in America since the civil war. A case will be started against the Veterans Adm and U.S. Vets claiming they conspired with others to enslave veterans. I must say we already have a settlement against the families they conspiered with and have recieved a 6 figure settlement with the family and the funds have been collected and paid to vets who were enslaved by all the parties named above We had to go after the family first to keep statute of limitations from expiring. Violation of the 13th adm gives a 10 year statute of limitations We are waiting for ACLU or other firms to see who will best represent us. I hope some who read this will be as offended as every person who has knowledge of this case.I hope some of you will follow as we continue our fight for justice

      July 5, 2012 at 4:45 pm |
  34. Frederick Shelton

    I saw your program on the ripoff charities and was incensed! I no longer donate to charities I'm not intimately familiar with. On the more positive side, my anger inspired me to take action. So I developed a program to teach troops coming out of the military, how to write resumes, interview skills, job seach skills etc... (I've been an exective recruiter for 20 years). A senior-level attendee at the base where I've started giving the program is in charge of over 1,000 people and told me it's the best program he's seen in 20 years in the military. I have to drive 120 miles roundtrip once a month and I do it for free but it's SO worth it. I'm writing it in book form because after viewing what the troops have access to now, I've come to realize this is badly needed. Talk about waking up with a sense of purpose! And if I hadn't seen your report, I wouldn't have had the idea. So thank you for that. I hope others find your hard-hitting style of reporting as inspiring as I have.

    July 3, 2012 at 8:19 pm |