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How a Network of Nonprofits Enriches Fundraisers While Spending Almost Nothing on Its Stated Causes
In September 2020, the Federal Trade Commission joined regulators in four states to sue four men behind a notorious telemarketing company called Outreach Calling. The FTC alleged that the company, which it described as a “sprawling fundraising operation,” had raised millions on the promise of helping the needy — cancer patients, veterans, firefighters — but instead used the money to line its pockets.The case was meant to put fundraisers on notice. The FTC would not only go after charities that improperly spent donor dollars, but it would “aggressively pursue their fundraisers who participate in the deception,” a news release said.
The executives and corporate entities behind the operation were fined more than $58 million. They were also banned from all charitable fundraising for life. But regulators kept one door open in most of the settlements: the ability to continue fundraising for political purposes.
For Thomas Berkenbush, who was a co-manager at Outreach, that provision would prove to be a windfall.
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How a Network of Nonprofits Enriches Fundraisers While Spending Almost Nothing on Its Stated Causes
ProPublica identified a group of connected political nonprofits — with names like American Breast Cancer Coalition and National Coalition for Disabled Veterans — that appear to be funneling more than 90% of donations to fundraisers.