Giving 'Til It Hurts

Sharyl Attkisson is investigative correspondent for CBS News.
Millions of Americans have opened their hearts and wallets and given to charities that promise to help returning veterans, wounded veterans and the families of injured and killed veterans. And plenty of your tax dollars have gone to these groups in the form of government grants. On top of that, they receive tax-exempt status courtesy of US taxpayers.

So it's more than just a little disturbing to find out how little some of these big-hearted sounding charities are doing.

To hear some of the charities tell it, plenty of donations are going to the cause. But the watchdog group "American Institute of Philanthropy" crunched the numbers and found many charities skewing the numbers. For instance, according to AIP, too many charities spend too much money on professional fundraisers and direct mail. and then count the huge expenses as "program costs" as if it's going directly to benefit veterans. Some charities pay big salaries to those who run them and family members who are part of the deal. Interestingly, it seems like people who start a veterans charity often have many other irons in the fire: they run several charities simultaneously and, according to AIP, may transfer donations from one to the other in a method that starts to sound like a ponzi scheme: each time donations are given to the next group, they're counted as if they're a brand new pot of money, upping the numbers for the receiving charity. In one case, the head of a charity reportedly had his hand in 30 charities over time. Most recently, he's been collecting more than $400,000 in annual compensation from a veterans charity. And, by the way, his wife is paid six figures to edit the charity's newsletter. There's another case of a charity that, according to its tax forms contributed ZERO dollars to veterans in 2003 and hasn't improved a whole lot since then.

You read correctly: of all the money they raised, not one cent went to veterans. It all went to fundraising, salaries, overhead and other expenses.

AIP stepped back from the spin and graded many charities, including several dozen veterans charities. More than half the veterans charities got D's or F's including some big names such as Disabled American Veterans (D), Paralyzed Veterans of America (F) and Blinded Veterans Association (D).

The news wasn't all bad. AIP gave out some good grades, too. Kudos to Fisher House Foundation, and Intrepid Fallen Heroes Fund, both of which got an A+. The National Military Family Association got an A. The Armed Services YMCA of the USA got an A-.

Congress is talking about forcing charities to have better disclosures when they solicit funds from donors so that you really know where your money is going. After all, it's okay to give till it hurts, but it's not really supposed to be this painful when you find out where all that money is going.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.