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Debunking a Charity Urban Legend

13 January 2015 at 9:33 am
Lina Caneva
A story that has circulated widely throughout the internet claiming some of the biggest charities in the world were reducing their “efficiency” by paying multi-million dollar salaries to their CEOs has been proven to be false.

Lina Caneva | 13 January 2015 at 9:33 am


Debunking a Charity Urban Legend
13 January 2015 at 9:33 am

A story that has circulated widely throughout the internet claiming some of the biggest charities in the world were reducing their “efficiency” by paying multi-million dollar salaries to their CEOs has been proven to be false.

Popular urban legend debunking website, which attracts around 8 million unique visitors every month, listed the story as one of its “Hot 25” – the 25 urban legends currently circulating most widely, as determined by frequency of access, user searches, reader e-mail, and media coverage.

The story warns readers to keep the figures it presents in mind before donating to one of the charities mentioned.

It claims to present a list from highest to lowest of charity CEO pay salaries, and connects this to how much of each dollar donated reaches the actual people the charity helps.

“The worst offender was yet again, for the 11th year in a row, UNICEF – CEO, who receives $1,200,000 per year (plus use of a Rolls Royce for his exclusive use wherever he goes, and an expense account that is rumoured to be well over $150,000). Only pennies from the actual donations goes to the UNICEF cause (less than $0.14 per dollar of income),” the original story claims.

“The second worst offender this year is Marsha J. Evans, President and CEO of the American Red Cross… for her salary for the year ending in 2009 was $651,957 plus expenses. Enjoys six weeks fully paid holidays including all related expenses during the holiday trip for her and her husband and kids. Including 100 per cent fully paid health and dental plan for her and her family, for life. This means out of every dollar they bring in, about $0.39 goes to related charity causes.

“The third worst offender was again for the seventh time was, Brian Gallagher, President of the United Way receives a $375,000 base salary (U.S. funds), plus so many numerous expense benefits it's hard to keep track as to what it is all worth, including a fully paid lifetime membership for two golf courses (one in Canada, and one in the U.S.A.), two luxury vehicles, a yacht club membership, three major company gold credit cards for his personal expenses and so on. This equates to about $0.51 per dollar of income goes to charity causes.”

The creators of the story claim to have surveyed around 60 charities, with the most efficient organisation being revealed as The Salvation Army.

“The Salvation Army's Commissioner Todd Bassett receives a salary of only $13,000 per year (plus housing) for managing this $2 billion dollar organisation. Which means about $0.93 per dollar earned, is readily available and goes back out to local charity causes,” it says.

“No further comment is necessary…’Think Twice’ before you give to your charity of choice as to which one really does the best for the most – or the least for the most, for that matter,” the story said.

But, which was founded in 1995 by Barbara and David Mikkelson in California and has become an authority on falsified internet stories, listed it as false.

“When deciding which charities to donate to, many people consider an important factor to be the "efficiency" of these organisations — that is, what percentage of the monies taken in by a given charity goes to funding its mission rather than being eaten up by costs such as fundraising activities, salaries, and other administrative overhead,” said.

“The (story) which began circulating in 2005 and has been re-circulated every year since then around Christmas time, attempts to steer potential donors away from inefficient charities.

“Unfortunately, much of the information it presents was inaccurate back in 2005, and it has grown only more so in the years since then, resulting in a misleading and outdated view of various charities.” used the Charity Navigator website and Forbes Magazine’s resources to present a more accurate representation of charity efficiency.

In regards to UNICEF, they said: “We're assuming the reference is to the President and CEO of the United States Fund for UNICEF, Caryl M. Stern, whose last reported total yearly compensation was $472,891, not $1,200,000.”

“Both Charity Navigator and Forbes rate this organisation's efficiency at 91 per cent, far greater than the 14 per cent claimed in the e-mail cited above. In response to the claim that UNICEF's CEO receives "a Rolls Royce for his exclusive use wherever he goes," UNICEF told us that "There is no Rolls Royce or company car provided for any staff member at UNICEF or the U.S. Fund, including the President and CEO of the U.S. Fund or UNICEF’s Executive Director.”

About the American Red Cross, they said: “The information presented … is outdated, as Marsha J. Evans resigned her position as CEO of the American Red Cross in 2005. The current President and CEO of the American Red Cross (since 2008) is Gail J. McGovern, whose total yearly compensation for 2010 was about $1,037,000 (considerably higher than the $651,957 figure mentioned above) and for 2011 was about $561,000. Charity Navigator and Forbes both rate this organisation's efficiency at 92 per cent, much higher than the 39 per cent figure claimed in the e-mail.”

About United Way they said “The United Way is another charitable organisation that operates on both global and local levels. We're assuming the story references the President and CEO of United Way Worldwide, Brian A. Gallagher, whose last reported total yearly compensation was $717,076 (including a base salary of $415,613, which is a bit higher than the $375,000 figure reported above). Charity Navigator rates this organisation's efficiency at 89 per cent, while Forbes rates it at 85 per cent, both much higher than the 51% efficiency claimed in the story.”

Finally, in reference to The Salvation Army said “The information presented above is outdated, as W. Todd Bassett stepped down as National Commander of The Salvation Army in April 2006; the current National Commander of the Salvation Army is William A. Roberts. The Salvation Army is not required to file a Form 990 with the IRS because it is primarily a religious organisation, but according to the Better Business Bureau (BBB), Roberts' last reported total annual compensation was $126,920, much higher than the $13,000 reported above. Forbes rates this organisation's efficiency at 82 per cent, a fair bit lower than the 93 per cent figure claimed in the story.”

Lina Caneva  |  Editor  |  @ProBonoNews

Lina Caneva has been a journalist for more than 35 years. She was the editor of Pro Bono Australia News from when it was founded in 2000 until 2018.

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    • Margaret Cross says:

      All I can say is I know the Salvation Army does a lot for the poor and uneducated…. a friend of mine is a director and has made it known to me how much they do. I also know many many people that have been helped by the Salvation Army… I don’t recall anyone ever saying that they have been helped by any other previously mentioned organization, not that they haven’t, I just don’t recall hearing about it. As far as Snoops is concerned, I sincerely doubt their credibility and find them to be very biased and wonder if they have their own personal agenda

    • MCS says:

      Pretty interesting and disheartening for 2020

  • Michael Oglesby says:

    In 1945 my father was island hopping taking Japanese held islands in the South Pacific. The Army flew some Red Cross people right after one battle. The Red Cross people organized a donut making for the troops. They had the US Army make the donuts using Army transportation, flour, sugar, oil, fuel, etc. The donuts cost the Red Cross nothing. It was all Army donuts after a long and dangerous battle. Then the Red Cross put the donuts on tables for the troops, right behind signs that said “10 Cents.” If I donated to the Red Cross, I think my father would spin in his grave.

    • Mary Murray says:

      Our Uncle Chuck served in Europe in WWII as a medic. He said he’d come out of battle and the Red Cross would ask for a dime for the coffee. They’d give the coffee to them when they said they didn’t have any money. Salvation Army never asked the GI’s coming out of battle for a dime. We always gave and still give to the Salvation Army never to the Red Cross.

    • Verle horn says:

      At least they were there organising the donut making. IF the army had all the ingredients and labor, why weren’t donuts made before their arrival? Maybe the funds raised were used to provide blood collection and transfusions or some other life saving activities, elsewhere. The red cross volunteers certainly did not volunteer to travel to the Pacific Islands during war time for a vacation, nor were the volunteers paid. When Sandy wiped out New York coastal areas and the red cross volunteers came and handed out sandwiches, most were happy to have something to eat during the storm that had wiped out houses, millions were left with no power, washed out roads and no groceries on the store shelves and no way for trucks to travel there to restock, however, on the news, a woman was complaining that all she got was a sandwich. There was NO power to heat or cook and she’s lucky the red cross volunteers were willing to risk their lives traveling through storm surge and washed out roads to bring something for thousands of starving people to eat. Point of view differs greatly -, from appreciation to entitlement. How would you feel if you were starving and no food was available until a stranger, at great personal risk, and cost, took hours away from their preferred activities to bring you a sandwich and how NOT hungry and entitled would you have to be to complain about the volunteers who brought it to you, on national news?

  • Brenda says:

    The Snopes article is pretty accurate. They used Guidestar for verification. Guidestar is an independent organization that digests information from IRS form 990. We use it for the Foundations I work for.

  • Iain says:

    The commentator should check the accuracy of her comments. All Salvation Army officers receive the same base salary with a increment every three years. After almost 40 years service my annual salary was around $20,000.00. I have never heard of a salary in the $120,000 range. Please please get your facts correct. If you are so wrong with the Salvation Army officers salary how can I trust what you say about the others.

  • J.R. says:

    Thank you, Lina, for setting the record straight . I concur with others about the Red Cross. My father-in-law served overseas and never failed to mention how the Red Cross showed up with coffee and doughnuts, but only for soldiers who could afford to pay for them. Also, I was living in Houston, Texas, several years ago. My family and I were moving across town and I had some furniture in excellent shape which I donated to the Salvation Army. Not more than six months later I happened across a pamphlet put out by this organization. It was composed of libelous, hate filled material about my own religion. My church gives generously to those in need, regardless of whether “Christian” or not. It rates at the top of all legitimate ratings because very little administrative fees insure donated money goes where it should. And there are others that do the same. Needless to say, I regretted ever giving anything to these two groups and neither of these groups have ever gotten a dime from me since. I would hope everyone will verify their sources before donating as I should have done. Best wishes to all who give from the heart with no strings attached!

    • Daniel Ait Soria says:

      My friend has volunteered for the Red Cross since Hurricane Katrina, and though he has helped (and facilitated) the feeding of thousands (over many different disasters) NEVER has any money been asked for food or drink. Please provide evidence to your claim, or retract your comments. Why would anyone want to dissuade charitable donation?

  • Christopher Barnett says:

    Mr. Bassett should get a raIse. I’m all in with SalvatIon Army. He should at least make three tImes that.

  • Heather Ritter says:

    I think the confusion about The Salvation Army salary is that these people are Officers, lifelong committed pastors in these positions. Their “salaries” are much lower but they re compensated also with housing and vehicles at each appointment they are stationed at. So when the person researched this article they were likely also given the value of the home, vehicles, and any other “allowences” reportable. But these are not paid to the person in the form of a salary and they are not a choice they get when they are told where they will go. They might get a nice house, they might get an apartment on top of a church. My parents are officers, our first appointment was the latter.

  • Earl says:

    I was homeless in Las Vegas for awhile and ate at St. Vincent’s (Catholic charity) and Salvation Army. I tried the St. Vincent’s work program but it was about as bad as the food which usually consisted of bird’s nest soup with hard to find protein and stale bread. I would regularly see people pull up with trunks full of food for donation that was often of high quality but never saw anything like that served to the homeless. A guy with a clicker counts the number of homeless they feed because they get a per diem for every meal from the government. I didn’t last long in the work program because it required four hours a day of work in house which often conflicted with the day labor jobs that were available. No big loss, I didn’t like staying there anyway and I could usually scrounge up enough to eat picking up aluminum cans. Salvation Army was much better. You had to sit through a sermon before breakfast but the food was decent and nourishing and it was well run. I give to them when I see the red kettles and now that I know they aren’t squandering their donations on overpaid execs, I’ll be donating more this year. Ironic that Salvation Army ranked highest because as a beneficiary of their services, I ranked them the same way. It’s a good organization.

  • CDHC says:

    NOT TRUE The average Salvation Army executive compensation is $231,979 a year.The median estimated compensation for executives at Salvation Army including base salary and bonus is $235,733, or $113 per hour. At Salvation Army, the most compensated executive makes $450,000, annually, and the lowest compensated makes $53,000.

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