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Debunking a Charity Urban Legend

Tuesday, 13th January 2015 at 9:33 am
Lina Caneva, Editor
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.

Tuesday, 13th January 2015
at 9:33 am
Lina Caneva, Editor



Debunking a Charity Urban Legend
Tuesday, 13th 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 Snopes.com, 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 Snopes.com, 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,” Snopes.com 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.”

Snopes.com 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 Snopes.com 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, and Editor of Pro Bono Australia News since it was founded in 2000.

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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

  • 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.

  • 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.

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