Originally Posted by Seattle PI

When a charity devours donors' money
4 Gig Harbor-based groups pass on just 7.4% to causes

-- The cause is noble, a pull at America's heartstrings. And donors respond, digging deep into their pockets to raise $2.6 million over the past three years to help veterans fallen on hard times.

"When America needed their service, they answered the call. Now here's your opportunity to support these veterans in their time of need," reads the pitch from the American Veterans Coalition. It cites the heartbreaking statistic that 33 percent of the nation's veterans are homeless.

What empathetic contributors are not told and may not realize is that a mere 8 cents of every dollar that the Gig Harbor-based charity spends actually went to help needy veterans, according to its Internal Revenue Service tax filings from 2003 to 2005.

Most of the dollars were eaten up by high professional fundraising fees, consulting and management fees, travel expenses and payments to the husband-and-wife team who run the organization.

Robert Friend and Shao Mei **** set up the American Veterans Coalition in 2002, along with three other non-profits -- the Children's Cancer Assistance Network, Disabled Firefighters Foundation and National Association for Disabled Police Officers.

Together, the four charities raised about $2.8 million in 2005 and spent roughly the same amount. But of those total expenditures, $208,000 -- or 7.4 percent of their expenses -- went to support veterans, children with cancer, disabled police officers and firefighters.

The couple paid themselves $155,000 for their work as president and vice president that year.

And it's not just one year of poor performance. Friend's and ****'s charities devoted less than 10 percent of their total expenses to program services in 2003, 2004 and 2005 -- far below the 65 percent recommended by most charity watchdogs.

That makes theirs the charity in the Puget Sound region that devoted the least to program services for every dollar they devoted to expenses from 2003 to 2005, according to a Seattle P-I analysis of financial data for charities with $250,000 or more in revenue.

Others are Caring for Our Children Foundation in Everett and the Vietnam Veterans of Washington State in Auburn; each spent less than 20 percent of their money on program expenses over the three years in question.

Multiple attempts were made to contact the principals at these charities, but none responded. Friend, the president, and ****, the vice president of the four Gig Harbor-based charities, did not respond to repeated phone calls left at their charities and their home.

"There's really nothing charitable about an institution operating that way," said Sandra Miniutti, vice president of marketing with Charity Navigator, an independent group that evaluates large charities. "It's just so far below the benchmark of the norm."

If a charity devotes less than one-third of its expenses to program services, it automatically gets a zero-star rating for inefficiency. Most of the 2,500 charities Charity Navigator rates spend 75 percent or more on program services, she said.

They also did not respond to requests by the BBB Wise Giving Alliance, which evaluates charities against 20 standards. The alliance noted on its Web site: "This lack of cooperation may demonstrate a lack of commitment to transparency and accountability."

Friend told The Hartford Courant in Connecticut in 2005 that his salary and the charities' high fundraising costs are justified. "You should see how much work goes into running four charities," he said, also noting how difficult it is to raise money without professional fundraisers.

The Washington Legislature is expected to pass a bill this session that would require financial reviews for charities with more than $1 million in gross revenue. Larger charities would be required to provide audited financial statements. House Bill 1777 passed the House and is now before the Senate.