Some Charities Singled Out
by Ore. Bill Supporters
Dakota Indian Foundation (Chamberlain, S.D.)
Dogs Against Drugs/Dogs Against Crime (Anderson, Ind.)
What it does: Provides dogs to police departments and trains canine
officers; teaches youngsters about drug abuse.
Amount raised in 2009 (most recent available): $1,046,292
Amount spent: $1,029,493
Percent of expenses spent on programs: 9
What it says: According to the organization’s tax return, it made $3,500 in
grants in 2009. Officials from the organization did not return phone calls
seeking comment, and e-mails were undeliverable.
Korean War Veterans National Museum and Library (Chicago)
What it does: Works to create a museum that will mark the history of the
Amount raised in 2009 (most recent available): $1,782,202
Amount spent: $1,745,901
Percent of expenses spent on programs: 33
What it says: Elise Bartholomay, the museum’s national campaign direc-
tor, said the museum is still under development and, as a result, it is
spending a lot of its money to get attention and attract donations. “The
[Oregon bill] simplistically holds all nonprofits to the same standard while
ignoring the fact that nonprofit missions vary greatly and therefore must
necessarily follow different paths to completion and fulfilling its mission,”
Ms. Bartholomay said.
Operation Lookout National Center for Missing Youth
What it does: Provides free services to help families find abducted and
other missing children.
Amount raised in 2009 (most recent available): $1,409,411
Amount spent: $1,421,120
Percent of expenses spent on programs: 12
What it says: Attempts to reach the organization by e-mail were unsuc-
cessful. According to the group’s tax return, it spent nearly $1.2-million on
professional fund-raising services in 2009.
Shiloh International Ministries (La Verne, Calif.)
What it does: Provides medical necessities and moral support to needy
children and provides assistance to the homeless and hungry, veterans,
and children’s hospitals.
Amount raised in 2009 (most recent available): $825,928
Amount spent: $829,220
Percent of expenses spent on programs: 3
What it says: A recorded message at the organization’s office says it is
a nonprofit California religious corporation that represents the American
Veterans Network and Handicapped Children’s Services of America. The
group’s tax return shows it spent more than $695,000 on professional
fund raisers in 2009. Representatives from the organization did not return
phone calls seeking comment.
The Wishing Well Foundation (Metairie, La.)
What it does: Provides vacations and other “wishes” to terminally ill chil-
Amount raised in 2008 (most recent available): $1,323,845
Amount spent in 2008: $1,307,437
Percent of expenses spent on programs: 10
What it says: The group’s tax return shows that it gave $57,861 in grants
in 2008. Its three largest program-service expenses were for fulfilling wish-
es for three children; one to visit a grandmother, another to visit Disney
World, and one for an Alaskan cruise. The organization did not return e-
mail messages seeking comment.
—Compiled by Lisa Chiu
MICHAEL MCDERMOTT, FOR THE CHRONICLE
Nonprofits that give little to their programs are “outliers” that “siphon away” gifts from
effective charities, says Carrie Hoops, of the Nonprofit Association of Oregon.
Watchdog Groups Praise Oregon Effort
to Crack Down on Abusive Charities
3. 6 percent to a high of 24. 5 percent on programs. All of those
organizations would be at risk
of losing their ability to get gifts
that are deductible from Oregon
But some of the groups that
would be targeted say the bill is
unfair and that it puts too much
emphasis on a single number.
The Dakota Indian Foundation, in Chamberlain, S.D.,
one of the groups on Oregon’s
worst-charities list, spends only
about 24 percent of its expenses
on its programs, which include
scholarships for Native American students and grants to help
preserve Native American culture. The group relies heavily
on professional fund-raising
companies that are expensive
but are also necessary for an
organization that is working to
build its donor base, says Ron
Kjonegaard, the group’s executive director.
“It really ticks me off,” Mr.
Kjonegaard says of the Oregon
bill. “We’re doing something
that these poor people on the
reservation wouldn’t get if it
wasn’t for us. ... We have a lot
of donors out of Oregon, and if
it passes in Oregon, other states
might do the same thing.”
But Ken Berger, president of
Charity Navigator, a charity-
ratings service, is enthusiastic
about Mr. Kroger’s approach.
He says his organization has
been revising its own ratings
system to give less weight to
overhead costs, but that doesn’t
mean such expenses should be
discounted altogether, especially in “extreme” cases.
Charity Navigator gives zero
stars (out of four) to any charity
Continued from Page 15
that spends less than 33 percent
on programs—a rating earned
by fewer than 2 percent of the
5,500 groups his organization
evaluates, he says.
Exceptions to the Law
Mr. Berger also praises the
Oregon legislation for taking
account of some “subtleties” of
the nonprofit world.
The bill would calculate the
gives zero stars to
any charity that
spends less than 33
percent on programs.
30-percent figure as an average over three years so charities would not be penalized for
having unusually high overhead
costs one year.
It would apply only to charities that are at least four years
old since new organizations
sometimes spend less on programs during their early years.
It would cover only charities
that must file federal the full
Form 990 tax return because
their annual revenue is at least
And it would allow the attorney general to waive the rules
for groups that are saving donations for a special purpose, for
example to construct a building.
The issue of administrative
costs has also been popping up
in some other states. For example, a bill was introduced recently in North Carolina to bar
nonprofits from getting state
money if they spend more than
15 percent of their budgets on
But Oregon would be the first
state to single out the charitable
deductions received by donors.
The law would also be largely
symbolic unless other states
followed suit since disqualified
charities could just concentrate
their fund-raising efforts elsewhere, says Mr. Jones, the Hawaii charity regulator.
In 2008 the National Association of State Charity Officials,
which Mr. Jones headed at the
time, told Congress it should
consider removing the federal
tax exemption from charities
that did not devote at least 75
percent of their expenses to programs.
That idea never went anywhere. And Theresa Pattara,
tax counsel to Sen. Charles
Grassley—the Iowa Republican
who is Congress’s most vocal
nonprofit watchdog—says she is
not aware of any Congressional
efforts to go that route.
Because it would face strong
opposition from nonprofit ad-
vocates, Jeff Tenenbaum, a
nonprofit lawyer in Washing-
ton, says any effort to regulate
fund-raising costs at the federal
level “would face a steep uphill
However, he and others say
that if Oregon enacts its legis-
lation, it would probably serve
as a laboratory for other states.
And if the law withstands a le-
gal challenge, “this would be
like mushrooms,” says Dan
Moore, a vice president at Guid-
eStar, a nonprofit research or-
ganization, and a former char-
ity regulator in New Mexico.
“It’s going to pop up all across