TV CHARITIES: LET THE GIVER BEWARE

CHARITY BY TELEVISION: The tube sells everything from new cars to light beer to starving children in Ethiopia. You know what you’ve got on the former--but how can you tell that the starving children are getting fed with your dollars? A report on TV fund raising by David Johnston and Jennifer Leonard, Page 3. They all get sold on TV--new cars, light beer and starving children from the Third World.

People who are moved to spend their money on the first two pretty much know what they’re getting. But what about the money that people spend as donations to feed children in faraway lands?

How do people know whether TV charities that ask--nay, plead and beg--for contributions will spend the money wisely, or even spend it as they promise?

For the most part, donors don’t know.

TV and charity have formed a grandly profitable partnership that is one of the last great unregulated financial frontiers in America.

TV fund raising is a booming, fiercely competitive business that leaders in the field say brings in well in excess of 1 billion tax-deductible dollars annually. TV’s growing sophistication at mastering the emotional skills to separate people from their money is being adopted by TV charities.

The biggest TV charity, World Vision Inc., based in Monrovia, broadcasts videotaped shows from a stage featuring giant clockworks and the theme that “time is running out” for a starving child somewhere.

A carefully worded appeal for money is made every three minutes on World Vision’s programs because research shows that is the most effective approach, according to Russ Reid, the Pasadena advertising executive who produces these and many other fund-raising shows. Such appeals helped generate $128 million in donations to World Vision last year--or one-third of a million dollars every day.

The problem of not knowing whether a TV charity does what it claims was illustrated Jan. 11 when the news broke that the Ventura County district attorney is investigating International Christian Aid (ICA) based in Camarillo. ICA, a major TV charity, raised $33 million worldwide in 1983.

ICA purchased 49 spots on Cable News Network, at a cost of $500 to $4,500 a spot, asking for money to aid starving Ethiopians. It also aired appeals on other stations including KHJ-TV, Channel 9, in Los Angeles.

But no evidence exists that ICA has done any relief work in Ethiopia.

ICA founder L. Joe Bass denies any wrongdoing. He told a press conference last week that the charity has bought $35,000 worth of food and medical supplies to send to other relief groups in Ethiopia. Bass said he assumes these supplies are sitting on a dock “somewhere” awaiting shipment to Addis Ababa.

An audit of ICA’s books is planned by the California attorney general’s charitable trust division. That would be its first full-scale examination of a major TV charity.

In 1951, the leaders of a small charity concerned with cerebral palsy decided to expand on the traditional theatrical variety show benefit featuring entertainers who donate their services. TV was a brand new medium and the charity decided to broadcast its show over a New York City station.

This first “ tele vision fund-raising mara thon “ broadcast from Carnegie Hall so moved viewers to help victims of cerebral palsy that they pledged the then-phenomenal sum of $276,408. The telethon was born.

Today, United Cerebral Palsy Inc. is a major league charity. “Weekend With the Stars,” its annual telethon hosted by actor John Ritter, is broadcast by an ad hoc network of nearly 100 stations around America.

(As an irony, Ritter starred in a wacky 1979 movie titled “Americathon,” which fared less well with audiences than the telethon that Ritter hosts. Ritter portrayed a U.S. President who organizes the biggest telethon ever to save the country from bankruptcy.)

But the $17-million-plus that last weekend’s United Cerebral Palsy telethon helped raise is just one of the benefits of such fund raising.

Thirty-five years ago “nobody had heard of cerebral palsy,” said United Cerebral Palsy’s chief fund raiser, Jerry Ball. “Many parents kept their children locked up--we called them closet cases--because they didn’t understand what cerebral palsy is.”

Today there are seven national telethons a year and more than 50 regional and local telethons, according to Theater Authority, which determines whether entertainers can appear without being paid. More telethons are being planned.

“All of the national voluntary health organizations are looking for exposure and entry into the big time and that means television,” said Stephen Bajardi, chief fund-raiser for the Juvenile Diabetes Foundation, which aired its first regional telethon on the East Coast one year ago.

TV fund raisers also use videotaped programs which can be rerun in different markets. And there is a trend toward buying 30-second and 60-second commercial spots, as ICA did for its Ethiopian appeals.

In addition, there are the electronic churches, which depend on donations from at-home viewers to stay on the air. Fund-raising experts believe the electronic ministries receive more than $500 million a year in donations.

Today such appeals fill the air around the nation and around the clock.

At one point Jerry Lewis’ 1983 telethon for the Muscular Dystrophy Assn. had to compete with five other appeals airing at the same time on Southland channels, four by electronic ministries and one by KCET, the local public station.

The National Assn. of Children’s Hospitals and Related Institutions faced a similar problem with its first telethon broadcast in 22 cities on Memorial Day weekend 1983. That was the same weekend that the Democratic National Committee chose to resume its telethon after an eight-year hiatus.

And telethons have been staged for all sorts of unusual causes.

A two-day telethon in 1975 raised $52,000 to help then Fresno County Sheriff Guy Langley defray legal expenses on charges he illegally laundered campaign funds. Langley later pleaded no contest.

In Barstow, a 1979 telethon raised $132,000 to finance a heart transplant, but the man died before a donated heart became available.

Peter Popoff, an anti-communist video minister, uses TV fund-raising proceeds to buy helium-filled balloons, which are sent wafting above the Iron Curtain laden with Bibles and religious tracts.

And telethons have caught on around the world: Australia had one to underwrite its 1984 Olympic team. The Argentines broadcast a telethon to help finance the ill-fated war with England over whether the Falkland Islands would be the Malvinas.

Televised appeals have been a boon to charities seeking to make this world a better place.

They’ve brought public attention--and money--to relatively rare illnesses such as cerebral palsy and muscular dystrophy. Christian ministers seeking fundamental changes in American values have prospered because TV spreads their words efficiently. And legions of sick and starving children around the globe have been saved because relief and development groups bought air time to publicize their plight.

But the entire business operates in an atmosphere of laissez-faire and let-the-giver-beware that is unusual even for the American private-enterprise system.

So far, neither government officials charged with overseeing charities, nor the TV industry, which profits from the time sold, has done much to help the public differentiate between worthwhile TV charities and organizations that are ineffective or, even, outright scams.

Only the charity business itself has made some limited efforts to publicize financial and other information which can help the would-be donor make decisions, provided they are willing to do some studying.

Several private groups play watchdog to the American charities, but their efforts are limited to analyzing what these charities say they do. Many charities, especially religious ones, decline cooperation with these voluntary financial disclosure efforts. (See box on this page.)

M. C. Van de Worken, former executive director of the National Charities Information Bureau, a charity watchdog organization in New York City that is closely affiliated with United Way of America, urges viewers to be skeptical about TV charities.

“People should not give just because they see something appealing,” Van de Worken said.

“The whole purpose of the TV show is to make the cause appealing,” he added. “It’s a hype, a pitch and they are doing a selling job, just the way car manufacturers are when they put some sexy person on an automobile hood and say ‘buy this car.’

“They aren’t saying anything about the quality of the car, what’s under the hood; they are selling by glamorizing the product,” Van de Worken cautions.

Federal and state governments collect financial reports from secular charities through tax returns, but they rarely conduct their own audits of the figures.

Bob Burns, general manager of the Los Angeles Department of Social Services, said that his office can do little more than make charities operating in the city disclose how much they raised last year, their current goals and the percentages of donated funds that they say will be spent on administrative and fund-raising costs.

Religious charities are immune from scrutiny by any earthly authority under long-accepted interpretations of the First Amendment. Said Burns, “If you call yourself evangelical--whether you are or not--and you spend 96 cents of every donated dollar on big salaries, hotel suites, corporate jets and gold-plated Jeeps and only four cents go to feed people, it is absolutely legal and there’s nothing we can do about it.”

Jerry Falwell sometimes holds up a thumbnail-sized piece of celluloid on which is printed, in microscopically small type, the entire Bible. He offers it free to viewers just for calling in on a toll-free number. The Rev. Robert Schuller sometimes makes a similar offer of an inexpensive bracelet trinket.

The two video preachers doubtlessly do this because they know the names of those to whom they send these gifts are likely to later reappear as signatures on donation checks.

This is the heart of TV fund raising: mining the audience for names.

“Many appeals you see on television are, in effect, prospecting for their direct mail operation,” said Tom Belford of Vanguard Communications, a company in Falls Church, Va., that advises such groups as Planned Parenthood and Common Cause on how to use TV to expand their membership lists. “They are literally mining the TV audience to find new contributors.”

The one person in a hundred who typically responds to a mass appeal will give again 65 to 75% of the time, say Belford and other experts.

To maximize their return on these newly mined names, some charities have regular giving programs designed to get a check a month from the donor. When such programs succeed, they generate bundles of money.

Because of the nature of TV, only certain types of charities have managed to successfully make use of its power to draw vast audiences at a low cost per viewer.

Russ Reid, president of the Russ Reid Co. in Pasadena, the leading producer of such fund-raising shows, said simple emotional appeals work best. One of his favorite causes is improving the quality of theological education. But he said he doubts it will ever be pitched on the tube because “the subject is too complex for TV and it doesn’t have broad appeal.”

Viewers give, Reid said, because “the average American doesn’t have power. He is looking for ways to make a difference, to feel significant, to get self-esteem; and what better way for him to get that than to be significantly involved in an organization which is meeting human needs?

“You look at the big money that is given to charities: Where is it coming from? Not foundations, not corporate givers, not major donors, but from Johnny Lunchpail.”

Reid’s shows tug at Mr., Mrs. and Ms. Lunchpail’s emotions so that they’ll give, and give generously, to such organizations as World Vision, the Monrovia-based Christian group that does relief work around the globe; St. Jude Children’s Research Hospital in Memphis, Tenn., and ChildHelp USA, which helps abused youngsters.

Last year individual Americans donated $59.5 billion to charities of all kinds, including churches, according to Independent Sector, a national umbrella group for 300 major charities and 300 corporations and foundations that give to charity.

These donations were only part of the vast charity enterprise. Charities own an estimated 9% of America’s privately owned wealth and employ more than 8 million people, but get little attention from the general news media.

In 1984, estimates Independent Sector, charities had $202 billion in revenues. In addition to individual donations, the money comes from the government, corporations, foundations and, mostly, fees charged by hospitals, colleges and other nonprofit service providers.

TV charities differ on how to best win the hearts and pocketbooks of viewers:

Reid’s videotaped shows for World Vision feature a stage set with clocks.

TV talk-show host Gary Collins and his wife, Mary Ann Mobley, continually remind viewers that “time is running out” for a starving child somewhere on Earth. Every three minutes viewers are asked to exercise their power to save those children by calling World Vision’s 800 number.

Priority One International, a Texas-based ministry that supports relief programs, once broadcast footage of its leader, the Rev. Maurice J. Mosley, unveiling a dead African baby as its mother wailed in the background.

Mosley intoned, “Don’t wait. . . . Last night, 40,000 people died.”

Whether this hard sell motivated gifts is questionable, since Mosley’s group incurred deficits its first two years and, although it’s still on TV, Marty Mosley, the minister’s son, said Priority One has yet to reach $1 million in annual donations.

International Christian Aid, the group under investigation in connection with its Ethiopian appeals, recently aired footage of a poor Portuguese woman turning her five children over to ICA because she couldn’t afford to feed them.

As the smiling children were led away, actor Joseph Campanella, who hosts many ICA shows, urged viewers to pay close attention to what he said was not a staged event. The camera then moved in on the woman for an extended close-up as she went into convulsions, apparently from an seizure.

The Jerry Lewis Labor Day Telethon came under fire in 1981 for a brand of emotional appeal critics called “the pity approach.”

Evan Kemp, Disability Rights Center executive director, wrote a New York Times article contending that the telethon contributed to prejudices against the disabled. He said the telethon portrayed those afflicted with muscular dystrophy as “childlike, helpless, hopeless, nonfunctioning and noncontributing members of society.”

Kemp, in concert with another disabled rights group, inspired changes in MDA’s 1982 telethon, including the portrayal of an increased number of adults with neuromuscular diseases. “They did a fairly good job” in 1982, said Kemp, who appeared on that broadcast.

But MDA Telethon revenues declined substantially--for the first time in the telethon’s history.

In 1983 the emphasis was back on children. “They went backwards,” Kemp said, “from pity to bad. . . . There appeared to be no attempt to present disabled people as active in society or having control over their own lives.” Kemp did note that MDA featured one impressive tape of former U.S. Sen. Jacob Javits, who suffers from amyotrophic lateral sclerosis.

Not until Labor Day Weekend 1984 did MDA bring its telethon revenues back to the 1981 level.

Christian Children’s Fund takes a different tack. It favors upbeat appeals featuring actress Sally Struthers and happy Third World youngsters benefiting from its development programs.

“We emphasize the hope and the reward rather than the despair and the guilt,” said Charles Gregg, the chief fund-raising executive for the Richmond, Va.,--based organization.

“We feel good doing it that way; it works, and I just don’t understand why other charities choose to portray the helplessness of a dying child with flies on its face. We won’t take their dignity away by showing them in their agony.”

The Ventura County district attorney’s investigation isn’t the first controversy for International Christian Aid, which is the relief arm of an organization Bass founded in Glendale in 1960 to smuggle Bibles behind the Iron Curtain.

Three years ago the U.S. State Department complained that ICA and two other relief organizations--World Vision and World Concern--were broadcasting out-of-date appeals for money to fight starvation in Somalia. It called their representatives to a meeting in Washington.

Arthur E. Dewey, head of the State Department’s Bureau of Refugee Affairs, said World Vision and World Concern readily agreed to stop the misleading broadcasts and to update future ones more often.

But, Dewey recalled, ICA’s representatives “attacked us with all sorts of invective and character assassination, and said we were just being soft on communism.”

An ICA spokesman said the organization arranged to change its programs before the State Department complained. He declined comment on Dewey’s recollection of what ICA officials said.

Not every telethon makes money. And many are risky ventures.

“Many charities see the great success of Muscular Dystrophy, Easter Seals and Cerebral Palsy and say ‘let’s do it,’ ” observed Harold Hoffman, president of Theater Authority, the New York City-based coalition of five entertainers’ unions that controls whether celebrities get waivers to appear on telethons without pay.

“Lots of groups fail to meet their goals,” often because “they don’t consider the costs and amount of organization involved.”

Many consultants steer their nonprofit clients away from TV: “It’s a terribly expensive way to raise money, and requires a pretty sophisticated organization to succeed,” says Florence Green of Green, Scribner & Co., a Santa Monica fund-raising firm. “It’s not unusual for 75 cents of every dollar raised to be consumed by television production and other costs.”

Long-established telethons aim to hold fund-raising costs to 25 to 33 cents of every donated dollar; some solicit corporate sponsorships in advance to cover the television costs.

Just how poorly a telethon can do was shown in 1980 when the Richard Pryor Burn Foundation aired a 14-hour telethon for burn victims just six weeks after the comedian nearly died in an accidental blaze. Comedian Redd Foxx, boxer Muhammad Ali, author Alex Haley and other noted guests were to appear, but failed to show up, although Sammy Davis Jr. did appear on videotape.

The goal was $1 million, but viewers telephoned in pledges of just $140,000.

Not all pledges materialize as cash. Although a few telethons have generated more cash than pledges, some collect only 60 to 75% of the pledged dollars.

And not every caller makes a pledge.

On Memorial Day weekend in 1983, the Democrats’ revived telethon drew 1 million calls around the country, but only one in five was a Democrat giving money. The other 800,000 calls came from people who meticulously dictated their names and their addresses before declaring their support for President Reagan and hanging up.

The most successful beneficiary of TV’s ability to catapult a minor organization into the charity big leagues by mining names and attracting monthly gifts is World Vision, the Christian relief and development organization founded in 1959.

In 1975, it took in $21 million. Today it’s by far the biggest TV fund-raising organization in America, with revenues of $128 million in 1984.

Individuals who call World Vision’s toll-free numbers are put on a mailing list. Many then donate $5 or more per month for disaster relief or to help develop self-sufficiency among Third World peoples through water-purification projects, improved farming techniques and animal husbandry instruction.

Others give $14 to $18 monthly to sponsor needy children. The giver gets a picture of a child and occasional letters from him/her. But the money actually goes into a pool that benefits entire families or communities. In one of World Vision’s programs, Child Care Partnership, more than one donor gets information about the same child.

Competition for donors who will give so generously--$18 monthly equals $216 annually--can be cutthroat.

Operation California, a small international relief agency based in Los Angeles, staged a three-hour variety show on CBS in early 1980 that ended with a 17-second appeal for funds.

After the network show ended, many local stations aired spots asking for money and flashing an 800 number--World Vision’s.

Operation California’s executive director, Richard Walden, complained. He learned that about 6,000 people responded to these paid commercials with a pledge and, more importantly, that their names were now in World Vision’s computers.

World Vision’s then president, Stanley S. Mooneyham, brought his lawyer to Walden’s office. Walden said Mooneyham apologized and unhesitatingly granted Walden’s request for a $250,000 donation.

Russ Reid, World Vision’s TV producer, later said buying the spots resulted from a “terrible mistake in judgment.”

Recently, KABC-TV reporter Larry Carroll has made repeated pitches during newscasts for a new relief group, Black American Response to the African Crisis, on whose board Carroll serves. Each appeal by the newscaster has included a telephone number flashed on the screen: World Vision’s.

A World Vision spokesman said “BARAC was the brainchild of one of our staffers and we are assisting them.” The spokesman said callers are asked whether they want to give to BARAC or World Vision and that they do not exchange mailing lists.

Last month the Council of Better Business Bureaus’ Philanthropic Advisory Service, another charity watchdog organization, issued a new report on World Vision which stated that the organization’s financial statements contain inadequate information to allow “informed decisions” about giving.

The service also reported that the related World Vision Relief Organization lacks an independent and active governing body. World Vision said it regards this as a technical matter of no significance.

Another major international aid organization that has grown through monthly sponsorships is Christian Children’s Fund of Richmond, Va., whose appeals feature Sally Struthers. In December, it met all but one advisory service standard, which involved a minor issue about proceeds from the sale of greeting cards. The service said Christian Children’s Fund is taking steps to meet the standard.

Of other major TV charities, those that met all of the Philanthropic Advisory Service’s standards in its latest report were the Muscular Dystrophy Assn., St. Jude Children’s Research Hospital, United Cerebral Palsy, Juvenile Diabetes Foundation, March of Dimes Birth Defects Foundation and ChildHelp.

Some religious groups say that they feel that the Philanthropic Advisory Service’s standards are oriented toward secular groups and are unfair to religious charities.

Many TV preachers--including Jerry Falwell, Jimmy Swaggert, Robert Schuller, Oral Roberts, Christian Broadcasting Network/700 Club and Rex Humbard--failed to respond to three or more inquiries for information sent by the Philanthropic Advisory Service.

Instead, many have joined another charity watchdog group, the Evangelical Council for Financial Accountability.

Founded in Pasadena and now headquartered in Washington, the council’s 350 or so members pledge to provide financial statements on request and to meet certain standards of honesty in fund raising.

Even that small effort at self-policing came only to avoid any risk of federal regulation of religious charities.

The council was formed in 1977 following a scandal in which the Pallotine Fathers of Maryland raised millions of dollars through direct-mail appeals, but squandered the money. Rep. Charles Wilson (D-Calif.), who has since died, introduced legislation in Congress calling for certain financial disclosures by religious groups at the time of solicitation, a proposal that sent shock waves through the religious fund-raising community.

Sen. Mark O. Hatfield (R-Ore.), himself an evangelical Christian, said he would introduce similar legislation unless the religious fund-raising community voluntarily set standards for itself.

Formation of the council effectively ended debate on Wilson’s and Hatfield’s proposals.

Some religious groups neither join the Evangelical Council for Financial Accountability nor submit reports to any other voluntary watchdog group.

One such religious organization that goes on TV to raise funds is the Faith Center Church of Glendale. Its controversial spiritual leader, W. euGene Scott, routinely makes pitches for money, sometimes shaming viewers who don’t call in with pledges.

Gene Scott used to appear on his church’s own TV station, Channel 30, but it lost its license following a five-year battle between the TV minister and government regulators.

The Federal Communications Commission, which issues TV licenses, demanded in 1978 to see church donor records after ex-employees of the church accused the minister of improper use of funds. Scott refused to comply, on First Amendment grounds, although he reported to his viewers on the use of the questioned funds.

The allegations against Scott were never proved, but the FCC revoked Faith Center’s license--a rare action--for failing to cooperate with federal investigators, a dispute separate from the original fraud charges.

Today, none the worse for his battles on behalf of religious freedom, Scott still appears on the air asking for financial support from his viewers. He no longer has his own station. He simply buys time on somebody else’s channel.