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August 26th, 2013
10:34 PM ET

Keeping Them Honest: Millions for charity, peanuts for dying children

The headquarters of Kids Wish Network is in a low slung set  of buildings north of Tampa.   The green awning carrying the logo of Kids Wish is small and almost impossible to see from the busy road that leads to the parking lot.  But the charity itself isn't small in the least.  Over the past decade, tax records show it's been highly successful.     Add up the money received for the past ten years and more than $127 million has been donated.  But those same records also show that $109 million of that has been paid right back to the paid telemarketers who raised it.

Kids Wish Network was the subject a months long investigation published in June by the Center for Investigative Reporting and the Tampa Bay Times.  CNN joined that investigation as it was nearing its conclusion.  That investigation labeled Kids Wish as America's "worst" charity and from the available evidence, it's not hard to see why.

CNN's Drew Griffin talked to three ex employees of Kids Wish—two who didn't want their names or identities disclosed.  And one who did.   The one who told us her story on the record is a woman named Meanda DuBay, who worked for the charity as something called a "wish coordinator" for about six months from mid-2011 until January 3, 2012 when she was fired.    She was fired, she says, because she took her concerns and complaint about Kids Wish to the charity's board of directors.  Meanda DuBay was fired, he says, about 45 minutes after hitting "send" on emails to board members outlining her assertions.

Kids Wish Network has filed a civil defamation lawsuit against her but along with that, convinced the FBI to raid her house, confiscate her computers and conduct a full blown investigation for several  months, all based on the charity's claim that Mrs. DuBay stole confidential electronic information.  The FBI ended its investigation with no charges filed and returned all of the seized computers belonging to her and her husband.

It's a story about millions of charitable dollars flowing into a charity that says it helps dying kids.

soundoff (13 Responses)
  1. Dave

    Is there any way to report the salary of Lanzatella and the other employees of the company. There should be a law that any non profit charity work is done on a volunteer basis.

    August 28, 2013 at 9:19 pm |
  2. John S

    The Kids Wish Network, in trying to refute CNN, states that they have an audited schedule of revenues and expenses. It is very clear that the audit firm Reeder and Associates, PA merely just compiled management's data and did not offer an opinion on the accuracy of the data.It is misleading of Kids Wish to call it audited. Furthermore they used Fiscal Year Ending 5/31/2012 instead of more recent data.

    August 28, 2013 at 8:59 pm |
  3. Kingcuz

    Why is it that.....when we hear stories of this nature it isn't shocking or suprising? It's starting to be the "norm" in our society!! Why do we continue to allow this kind of MESS to FESS in our country? If the facts are there, swift action and justice should be the top priority.Make an example of these types of companies and let others with similular tactic know that we won't tolerate it anymore! When we take advantage of caring, loving people in this nature and using sick kids as a means to profit our own greed.... SMH!!

    August 28, 2013 at 8:55 pm |
    • Derrick

      Swift action of justice will never happen for people like this. How many politicians raise money to help the good of the nation only to ignore the very people they promised to help once they are elected? There will never be justice for these people. The only justice we can hope for is through journalism causing a stain on their reputation which causes them to close down.

      August 28, 2013 at 10:41 pm |
  4. Rich

    Why is this surprising? The IRS has certain requirements that need to be fulfilled by any "charity". When these requirements aren't met they are supposed to audit and if they find abuse, shut the charity down and prosecute those abusing... 3% of their donations going to charity? Where's the IRS in this?

    I'm sure if these investigated most of these "charities" – they would find an overwhelming number fake, prosecute their "directors" and recoup money back to the donors and govt...

    August 28, 2013 at 8:54 pm |
  5. Tim

    I hope Ms. DuBay filed a countersuit against them for harassment and defamation - and possibly wrongful termination. I'm not a fan of excessive litigation, but they started it, and it sounds like they have it coming based on the results of the investigation.

    August 28, 2013 at 8:23 pm |
  6. Matt

    This story needs more fleshing out. The Kids Wish Network has posted a reply to CNN coverage which cites information that diametrically refutes CNN's reporting. Questions need answering: Is there truth to the "whistleblower" stealing data to form her own charity? Does she have an axe to grind and is she willing to lie about it? What was the FBI told and what is the status of their investigation? Where is the IRS on all of this? What is the law regarding employees/board members who profit, directly or indirectly, from the charity's funds? What is the federal/state law on this? What kind of output does KWF produce? How many children has it helped? Annually? How so? How many employees does KWF have and what are their salaries? What does Karen Pelle, KWF board chair, think about this? Has anyone asked? Most organizations circle their wagons when under assault, especially if they don't have trained communications staff. Are they willing to talk now? What about their attorneys? KWF raises issues about how CNN calculates its percentage on the dollar because, they claim, CNN did not take into account inkind donations, while the charity must declare inkind donates as cash value. What is the truth on that? You piece is either extremely heavy handed and a smear, or its a bullseye. So far, I can't tell which.

    August 28, 2013 at 12:46 pm |
    • Terri T

      You missed the first point of the story, the call centers that are hired by the charity get almost all of the money. This happens with almost every charity. Many of these centers contact charities and offer to solicit for them and the charities agree to the deal. When they call me, I tell them I never donate when people call me. Over the last several years there have been multiple stories about the centers that solicit money for fire and police associations taking most of the donations, leaving the charities high and dry.

      In a time when CEOs world wide embezzle their companies into oblivion and the Madoffs who steal from their friends, why are you surprised that there are a multitude of fake charities? News reporters are doing stories on this problem constantly. If there is a way to get people to give you money, the greed that his culture has built, will find it.

      I remember when people took pride in their work instead of taking shortcuts no matter the cost and making a decent living was enough for them.

      August 28, 2013 at 11:21 pm |
  7. Robin Simons

    Amazing investigative reporting again by Drew Griffin, professional, in depth. Drew researches every story, knows every detail, aspect can answer or ask any question regarding the story he is reporting on. I highly respect and always look forward to any and all of Drew Griffin's segments. Thank you CNN and Drew Griffin for excellent reporting.

    August 27, 2013 at 8:59 pm |
  8. Vivian Shnaidman M.D.

    Good story – but hardly surprising. Why is it so terrible when a supposed non-profit does this but it is okay that the health insurance industry spends $15 million a day not paying its claims, and ends up paying just $0.078 (that's 7.8 cents) of every insurance premium dollar to doctors? I'm sure if you look at other industries that are required by law (car insurance, MEDICARE – which is privatized although most people don't realize this, and probably pays out around the same amount for health care claims, Medicaid (likewise) and probably other things like bridge and highway tolls which I haven't researched but by rough calculation is about the same distribution) you would fine that most money goes into someone's pocket who is not actually doing any of the work. Start by researching health insurance. Let people know that the famous Obamacare which your network supports unequivocally is simply going to put more money into the pockets of insurance executives and will not change the proverbial "access to healthcare" one iota. The truth is that anyone can get health care. Just pay for your doctors' appointments. It is still much cheaper than paying insurance premiums since you only can get 7.8 cents back on your dollar.

    August 27, 2013 at 11:53 am |
  9. walter h

    I would love to donate to charities but this is the reason why people dont donate cause they pocket the money .Shame on them people.Its All about the Benjamins for them.Thinking of how they can screw over the compassionate people is their No.1 Goal.....Welcome to America

    August 26, 2013 at 10:53 pm |
  10. Bennie Sweat

    On telemarketers call for donations, I have received dozens and dozens of calls, I have even donated to some of them, but, I ask the person on the phone if he is a paid profesional fund raiser? I was surprised when he said, and I quote, "Every got a mortgage." And thw nwxt one ansered, " Everybody got to eat." And I stoped the next one, a lady whe she stated, "As a compensated fund raiser." I stoped her in her tracks and said, "Mam, you just stated you are a compensated fund raiser, I said I don't give to this type of calls.

    August 26, 2013 at 10:51 pm |
  11. Jal

    Truthfully, this doesn't shock me. I say this as my own labor organization created a foundation. We are a non-profit 501(c) 5 in California and created a 501(c)3 charity. In the first years, our Board used a Fundraising group and we were amazed how much their take was; close to 70%. I hear this time and time again. Honestly, I tell citizens to stay away from donating any moneys to our organization. Good story Anderson!

    August 26, 2013 at 10:47 pm |

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