The idea of charity gets abused all the time.

  •  Someone donates a nasty old pair of pants and claims $50 in value for the donation.  
  • Robocallers target lonely older people to pressure them into giving money to starving kids in Africa or moms with cancer, with 5 %, at best, of the income actually going to the needy. 
  • Adorable little kids come to the door with wrapping paper and candy bars, for the chorus or the orchestra or softball uniforms. 

Underlying all this is the idea that we get an incentive for giving: a little shelter from the taxman for what we have and will give to help another. 

There is a lot of distrust of many charities- people are often suspect that the money donated isn’t going to do the good the organization has promised. The vast majority of nonprofits are honorable, doing all they can do to deliver their promises. However, there are some that are trafficking in deceit, and we love to hate those people. 

We Love to Hate Frauds & Fakes

For some reason, many people seek out and revel in exposes about abuses in charitable organizations.  Headlines scream about real or alleged abuses of donor dollars as public outrage grows. There are some truly heinous cases of this behavior, the frauds and  fakes, the robocalling machines and boiler rooms that turn over pennies on the dollar.

Examples of this bad behavior are blasted all over the media and a few of the” I told you so’s” sit back with their arms crossed, justifying their lack of support. 

But worse than these are the people of means who use their wealth to manipulate systems to their will: money as a lever, bludgeon and shield.  The ones I am pointing out today share the worst qualities of the scammers with a dose of major hypocrisy thrown in. 

Some of the worst offenders: 

Above the law: America’s worst charities: https://www.cnn.com/2013/06/13/us/worst-charities/index.html

Hall of Shame: https://www.charitywatch.org/charitywatch-articles/charitywatch-hall-of-shame/63

Those folks are really reprehensible and there is no doubt they represent the worst aspects of fundraising.

 And just when you think you have seen the worst, some folks come along and show you how much worse they can really be.

A New Low

There is one new charity scam that has recently been revealed- and this one is that is truly venal.

Amongst all the supposed ‘shock’ that wealthy families will go out of their way to assure their child gets into a good, or at least desired, school, one of the biggest compounding factors is that these people doubled down on this spend: it is not listed as a business expense, or hobby or trip, the bribery was paid as a ‘donation’ to a fake charitable organization. What is even more appalling than that is that the false nonprofit was supposedly proving funds to support education.

Bribe someone of questionable ethics to cheat on behalf of your already indulged progeny and then take those fees and write them off against your taxes. If you will pardon the pun, this is just rich. There is a certain beauty and symmetry in this scheme; its was clever in its original inception.

Balls or chutzpah? Both Repulsive

So, not only are they rich, not only do they seem to feel it’s fair play to pay whatever for whatever sleight of hand required to assure admission, it is cloaked ( financially anyway) as a charitable donation to an education foundation. That takes balls, or chutzpah or complete cynicism, maybe all of the above. Using the tax law to shield the income they used to buy cheating test proctors and coaches reveals not only an absence of moral code but mendacity.

Regardless of how those funds could have been better spent, how many others had been denied fairly earned opportunity, the choice to add insult to injury is truly repusive. As someone who works hard to gain and keep the trust of those donors who have chosen to trust me, this last layer of corruption is tough to countenance.

Money Talks, Always Has

Sure, we all know that money is the greatest social lubricant after alcohol; it greases lots of wheels and palms. I had a classmate with perfect SAT’s who was only waitlisted at the same college as one of our other classmates, a trust fund party boy with mediocre grades at best, was accepted immediately. Maybe the new building with his dad’s name on it could have helped, who knows?

Or a young man, sitting on the bottom spot on the waiting list, suddenly jumps to the  #1 spot after a very generous donation to the Education Fund was made by a family member.  

The difference here is that as unfair as it may seem, the school got a new building that all students could use; the donation was used to fund a scholarship program- another actual student benefited.  So, while still bribery, the ultimate beneficiary was the school, not a reduced tax bill. 

The desire to use big money to obtain some things that others can’t is hardly new, using graft to protect income is a creative new wrinkle.

Pigs Get Fat, But Hogs Get….

Of course, remorse and 20/20 vision come with hindsight- but too little, too late. I heard this phrase once, hated it, but remembered it: pigs get fat, hogs get slaughtered.  Bad enough to attempt to corrupt the system but then to shelter those payments via charity…….that takes a particular type of character to see this as a reasonable way to go. 

There are all sorts of implications, conclusions and opinions that come from these revelations, but to me, the last slap on the face was the hubris to deduct bribery and graft payments as charitable gifts- and worse, charitable gifts to benefit the educationally needy. 

So? 

What does this all mean? Will it blow over until it happens again? Will it require some fundamental changes to admissions procedures and oversights? 
Perhaps, but more than likely, the big profile offenders will be forced to pay fines, and may lose a business deal or 2.  Eventually,  though, the outrage will die down, the cheaters will go underground for a few years until a clever new way to abuse privilege and exploit good intentions can be  devised. 

Bottom Line: 

If the payments to cover the corrupted exam proctor or compromised coach were not additionally charged off as charitable, would the crime be as great?

Yes, the charitable bit only added icing to the cake of moral compromise; it is the willingness of so many to so easily and cavalierly step on ethics and fairness in order to obtain their goals that is the root of the problem.  The additional bonus of calling it charity isn’t that much further down the road of corruption. 

The Latest: 

One of the actresses in this case, one accused of spending $500,000 to get her kids into USC byway of the rowing program, has pled not guilty to the charges of mail, honest service and tax fraud.
Her reasoning is so utterly perfect for this case:

 She thought she was only breaking rules, not laws.   

    • Half a million dollars to bend some rules? Really?  
    • Pasting face pictures over an athlete’s body to fake being a collegiate level athlete is bending the rules?
    • Having someone else take tests and complete applications is just a little over the line? 

Her co-conspirators didn’t warn her about the possible severity of the case. 

    • Bribery
    • Fraud
    • Money laundering

 In the end, none of this is sadly surprising, and will certainly not herald then end of this kind of behavior.

It’s the cynicism of making tax deductible ‘donations’ to benefit ‘disadvantaged youth’ that galls me ost of all and for that, I do hope the book, the one no one got around to reading, gets thrown on them. 

Although it might be more fitting for the punishment to be for those found guilty to fund college prep courses and tuition to real students, real disadvantaged youth, for the next 25 years.

What a great legacy that might yield. 

What do you think? 

Does this offend you? 

Or is this business as usual? 

Would love to see your comments……………

 

For more read this: 

IRS: Admissions Scandal Parents May Face Big Tax Levies for Faux Charitable Contributions

 

Scandal Sparks Review of University Fundraising/Admissions Overlaps

image credit: https://uopnews.port.ac.uk/2019/01/07/are-small-charities-vulnerable-to-fraud-risk-an-exploration-of-perceptions-around-charity-fraud-risk-and-the-factors-influencing

https://www.charitywatch.org/charitywatch-articles/charitywatch-hall-of-sham

https://quotefancy.com/quote/1482532/Sal-Albanese-It-always-takes-a-scandal-to-bring-about-refor