In 1984, the American Cancer Society forced James Reynolds out of a job. He had led the respected organization’s Knox County, Tennessee, office, but ACS accused him of sloppy record-keeping and of stealing a vintage car donated for an auction. Reynolds was apparently undeterred. He promptly opened up a new charity, giving it a name that was shamelessly similar: the Cancer Fund of America. He’d go on to found several other similar charities.
On Tuesday, the Federal Trade Commission announced charges against Reynolds and several aides, alleging that the organizations were charities in name only. In fact, the government says, the four organizations stole $187 million between 2008 and 2012 in donations, which they diverted into “lucrative employment for family members and friends, and spent consumer donations on cars, trips, luxury cruises, college tuition, gym memberships, jet ski outings, sporting event and concert tickets, and dating site memberships.”
Less than 3 percent of the money raised went to patients, the FTC said. All 50 states and the District of Columbia joined the FTC in the charges.
The way the Cancer Fund of America and its brethren—Cancer Support Services, the Children’s Cancer Fund of America, and the Breast Cancer Society—worked was straightforward, the government alleges. They hired fundraisers to gather donations. The fundraisers, for-profit telemarketing and mail services, would send out solicitations designed to tug at heartstrings, signed with the names of supposed cancer patients. The fundraisers took a cut of whatever money they were able to bring in—often 80 percent or more, and sometimes as high as 95 percent. Even with those hefty fees, Reynolds’s charities were able to live lavishly on the remainder, with trips to Disney World and Carnival Cruises.