Do you donate to charities supporting veterans in SC? The state says some are scams

In 2011, as American troops were withdrawing from Iraq, a group called Veterans Support Organization spread out across South Carolina setting up booths in front of popular big box stores like Wal-mart, collecting donations ostensibly to help homeless veterans into permanent jobs and homes.

The solicitors often wore fatigues and presented themselves as former homeless vets.

The problem was some were vets, some weren’t. And they were being paid 10 percent of what they collected for the charity, a state official said.

“That was their jobs program – getting vets to collect donations,” said Kris Tourtellotte of Myrtle Beach, a former head of a separate military charity he founded in Little River. “And the money would all flow back to the group in Florida.”

Tourtellotte filed a complain against the Veterans Support Organization with the S.C. Secretary of State’s office, which is responsible for enforcing the state’s charitable giving laws.

About 13,000 charitable organizations are registered with the S.C. Secretary of State’s office. Of those, 1,500 to 1,800 are thought to be aimed at helping veterans or support U.S. troops, based on their names.

The number is high because each individual chapter of the American Legion, the Veterans of Foreign Wars and other established veterans groups must register before they can achieve non-profit status.

Hundreds of other organizations collect donation for military purposes — everything from providing therapy dogs for PTSD victims to specialized homes for disabled vets.

But concerns abound. The most common are charities that give low percentages of what they give to service programs as opposed to what they spend on expenses, administration, salaries and fundraising.

Most often, a charity organizer will hire professional fundraising services to collect money via telephone, direct mail or the internet, said Shannon Wiley, the secretary of state’s general counsel. The service keeps a very high percentage of what is raised and gives a small percentage, say 10 percent, to the charity. The charity then gives a small percentage of that total to service programs and pays its administrators high salaries and incur steep expenses, she said.

One charity collected money from companies for a job fair in Beaufort, then didn’t show up, according to the S.C. Military Base Task Force, which is helping to monitor military charities.

And some veterans also have been charged for services that would be free through the federal Department of Veterans Affairs, Tourtellotte said.

Since 2011, Secretary of State Mark Hammond has named 18 military-themed charities to his annual “scrooge” list, released during the holiday season. They are charities whose collections practices are shady or who give such a small percentage of what they collect in service programs that they aren’t considered legitimate, Wiley said.

“And we have filed several injunctions against organizations soliciting on behalf of veterans and we’ll continue to take a hard look at them,” Hammond said. “And we’ll continue to do what we can to educate the donor.”

Some charities use the military to pull at the heartstrings of donors, much as they do with children’s and police and firefighter charities, Tourtellotte said.

“You say ‘military,’ and people just open up their wallets,” he said.

Among the most recent military organizations cited for bad practices by the secretary of state are:

2017

▪  American Veterans Foundation, Sarasota, Fla. They are on the list for their “abysmal” 8.3 percentage spent on programs

▪  Honor Bound Foundation, Inc., Darien, Conn., which spends 29.7 percent on programs.

2016

▪  Center for American Homeless Veterans, Falls Church, Va., 27.3 percent.

▪  Military Order of the Purple Heart Service Foundation, Annadale, Va., 18.8 percent.

The Military Order of the Purple Heart foundation said in an email said that 90 cents of every dollar of its cash donations goes to programs. But it has higher costs than most charities because most of its donations come in the form of cars and household goods that have to be converted to cash.

“So-called charity watchdog groups apply a ‘one-size-fits-all’ grading methodology that fails to take into consideration the charitable business model based on the donation of material goods and the acquisition and conversion costs associated with that model,” it said.

2015

▪  Cars Helping Veterans, Rochester Hills, Mich., 24.1 percent

Besides the Military Order of the Purple Heart, representatives of the charities could not be reached by The State on Wednesday.

By contrast, the national Wounded Warrior Project donates 70.5 percent of its collections to programs. The Better Business Bureau recommends you not donate organizations that funnel less than 65 percent of collections to programs.

But with 13,000 charities to monitor, it’s difficult for the secretary of state’s office or online monitors like charitywatch.org to verify all of information provided by the charities themselves.

And some charities don’t register with the state at all.

“Unfortunately, there are organizations out there who have used certain techniques to mask what that are doing,’ Wiley said. “Things like overinflating their gifts-in-kind program to skew their percentages.”

If the Internal Revenue Service discovers that a charity is cooking the books, the charity could risk fines, lose its non-profit status, or see organizers sent to jail, she said.

“There would be consequences,” she said.

Still, the office depends upon members of the public, like Tourtellotte, to alert them to possible scams.

“With the help of the secretary of state, we got them banned,” Tourtellotte said of the VSO organization.

The S.C. Military Base Task Force – which is appointed by the governor to boost and maintain missions at the state’s military bases and to support veterans – is also looking for ways to inform the public about possible scams.

“We’re trying to figure out who they are, where they are,” said Charlie Farrell, the task force’s executive coordinator.

Hammond recommended that anyone thinking of donating to a charity go to the secretary of state’s Website – scsos.com – to check a charity’s financial status before giving. There, members of the public can also fill out a charitable solicitation complaint form.

Complaints can also be registered by calling (888) 242-7484.

“The public is our eyes and ears,” Hammond said. “And the best cases come from the donors.”

This story was originally published February 7, 2018 at 7:01 PM with the headline "Do you donate to charities supporting veterans in SC? The state says some are scams."