ESPN recently ran an expose uncovering the misappropriation of funds at Los Angeles Clippers basketball star Lamar Odom’s charity – Cathy’s Kids. The charity, named after Lamar’s mother who died of cancer, claims to fund cancer research for children, but tax records for the last few years have shows that the $2.2 million they raised was used to finance an elite youth basketball team.
Lamar Odom acts as the president of his Los Angeles headquartered charity, and his signatures are on the tax returns they filed. There are several charities which have been accused of using their money to "raise awareness," pay ludicrous administrative costs, throw lavish events or purchase PR – but they tend to be clever enough to at least spend a nominal amount of the money they raise on the actual cause they claim to support.
Odom’s case reeks of flagrant fraud, and he should be going to jail for it. Unfortunately, charities are rarely held accountable for this kind of behavior. People have become inherently skeptical about the effectiveness and fidelity of charities, because of these infuriating "loopholes," re-appropriation of funds, and sponsoring of activities outside the charity’s mandated cause.
During my stint in disaster relief, the company I worked for witnessed Red Cross ineffectiveness on the ground in Sri Lanka – storing medical and food supplies, while getting bogged down in endless bureaucratic foot shuffling. It inspired the company’s mission statement to get around the red tape and offer direct, effective relief. Many people blame the third world governments for corrupting the delivery of charitable goods to those in need, but the Red Cross has also faced fire at home for its mishandling of the 9/11 recovery funds – which amounted to handing out coffee and blankets at the WTC site, and storing up funds for non-9/11 related activities.
Some people have argued that our cultural attitude towards charities is to blame – that we need to allow leaders to be paid competitively, encourage overhead spending, and risky long-term investments. The Susan G. Komen Planned Parenthood disaster last year showed that public outrage could also redirect popular charities’ decisions. But considering a popular Republican argument for limiting social welfare is that charities can fill the void of taking care of the needy – perhaps a strong regulatory option is needed. If we had a vicious, foaming at the mouth agency in charge of enforcing charity spending standards, perhaps we wouldn't have so many people creating non-profits as their personal slush funds.