Poorly Run Charities: A Solution
Today’s Washington Post carries an interesting, dirt-filed piece about a the Veterans’ charity Help Hospitalized Veterans. The group spends only 31 percent of its revenue on programs and exists mostly to distribute craft kits to veterans in the hospital. It seems to have high overhead, pays over a half million a year to its founder and his wife, and spends a lot on fund raising. The Post explains:
Some recipients of Help Hospitalized Veterans’ direct-mail solicitations said they were surprised by the frequency and heft of the mailings. “Those guys are relentless,” said James Lynch, a veteran from Merced, Calif. “These guys seem to hit me from twice a year to every four months. Anytime they’re spending money on postage and things like that, I wonder what the return is on it.”
Based on what I’ve read I have no doubt that the group is poorly run, squanders a lot of money, and probably is not worthy of support. But, given what has come out, I tend to think that the groups’ days are numbered anyway.
Although they seem to have have no basis for doing so, the Post‘s article makes it sound like many members of Congress would want the group stripped on its tax exempt status. This seems like a bridge too far. Organizations, in general, don’t ultimately pay taxes anyway: They either distribute revenues to individuals or invest it in capital assets that the corporation owns. In the end, they don’t pay much in taxes anyway because can always shuffle around and hide their revenues anyway. The best solution would simply be to asses all taxes on individuals and, thus, do away with the entire issue of “tax exempt” and “non tax-exempt” organizations.