The fundraising letters sounded warm and loving — a promise that a $10 donation every month could help provide a US military veteran with suicide-prevention counseling and medical care.
But $20 million later, the federal government declared that Help the Vets was a phony charity.
Founder Neil Paulson spent 95% of the group’s revenue on more fundraising to keep the money rolling in, the Federal Trade Commission charged — and on his own $246,000 compensation package.
Veterans got nothing.
Help the Vets promised to fund “medical care.” That turned out to be a voucher good at a single chiropractic clinic in Florida.
The group fraudulently claimed it spent $12 million on “family retreats” that were actually time-share vouchers, mostly in Mexico, that practically nobody used.
Its “suicide-prevention hotline” was Paulson’s own cell phone number.
Less than $72,000 was left in the bank in 2018 when the FTC stepped in.
Paulson, a former candidate for mayor of Orlando, Fla., had to repay nearly $1.8 million after the FTC sued him. But no one was criminally prosecuted.
Among Paulson’s sins was duping the massive charity ratings service Guidestar, which gave his group its top grade.
Guidestar was caught flat-footed, in part, because it tries to monitor 1.8 million nonprofit organizations.
It’s a scattershot approach that puts charities in the driver’s seat — and leaves the rest of us playing donation roulette.
For military-minded donors, this kind of madness now has a cure.
A ratings service called Charities for Vets focuses only on nonprofits that promise to help US military veterans. Think of it as a reimagined Consumer Reports that covers a narrow band of products — both the good and the bad.
We show which veterans’ charities are fraudulent, or wasteful, or sit on enormous stockpiles of money without deploying it as they promise.
And the service promotes charities that do provide America’s bravest with health care, housing, education, career counseling and service animals.
We use a strict formula to determine each charity’s rating as “Recommended,” “Highly Recommended” or “Not Recommended.”
We subject each charity to four tests, and failing any of them results in a “Not Recommended” rating. (You can’t earn three out of four stars and call it a win.)
The 41 veterans’ charities on our “Not Recommended” list have combined annual revenues over $1.1 billion.
The idea is to redirect some of that huge cash pile to organizations that practice what they preach — 61 of them at last count.
You’ll recognize some names on both lists.
We recommend giving to the Fisher House Foundation, the Tunnel to Towers Foundation and Semper Fi & America’s Fund, all of which spend less than 10% of their budgets on overhead expenses like staffing, office space and advertising.
But we don’t recommend Paralyzed Veterans of America, which spends 44% of its budget on overhead.
And the Purple Heart Foundation is a no-go because its overhead consumes an astonishing 94% of its budget — with 70% going to professional fundraising fees alone.
Yes, there are more obvious frauds, like Allied Veterans of the World. It ran bingo games and coffeehouse sweepstakes for years, spending the tens of millions of dollars it raked in on waterfront homes, Maseratis and Ferraris.
The Harvard Law School-educated mastermind behind the US Navy Veterans Association allegedly pocketed $6 million while claiming to be a Navy Reserve lieutenant commander. He was carrying $980,000 and several fake IDs in a suitcase when police caught up to him at the end of an eight-state manhunt.
Such criminality is beyond offensive. But when the Disabled Veterans National Foundation spends 77% of its $30 million budget on overhead, and the Air Force Aid Society asks for money despite having assets worth nearly 20 times its annual budget, these are just white-collar versions of the same kind of racket.
Helping our veterans shouldn’t be hard, and it shouldn’t be heartbreaking. Whether it’s a con man or a big brand that wastes your money, ultimately veterans are the ones who pay the price.
But this Veterans Day, Americans who want to support and honor our heroes without being scammed have an easy way to do it.
Lt. Col. John Stark, US Army (ret.), serves on the advisory board of the nonprofit Charities for Vets.