Scam PACS

Scam PACS are non-profit charities that harvest donations in the name of various worthy causes such as cancer patients and the family of fallen police officers. In fact, most of the money (~90%) goes to companies that operate under laws that govern political action committees or PACs. A Reuters investigation reports:

BIRMINGHAM, Alabama – From unmarked strip-mall offices in small-town Alabama, the calls go out across the United States, meant to talk people into giving money for heart-tugging causes like helping breast cancer patients or the widows of fallen police officers. 

Even as they charmed millions from credulous donors, a dozen former callers for two major fundraisers told Reuters that they knew their companies would be keeping the vast majority of it. And the groups they were raising money for weren’t charities at all, but political action committees, which normally are set up to gather funds for candidates or political causes.

“The motto was, ‘Leave your morals at the door,’” said Alexander Lefler, 21, who worked for nearly a year at a call center southeast of Birmingham, Alabama, describing what he saw as high-pressure and deceptive tactics. “We kind of all understood what we were doing was wrong, but I needed a place to live.”

These so-called “scam PACs” and their fundraisers exploit the gray zone between U.S. election finance and state charity fundraising laws, regulators told Reuters. They often are set up as super PACs, groups which in recent years have been empowered by the courts to raise and spend money in unlimited amounts, with little regulation.
But “scam PACs” are not like other political action committees. Rather, they and their fundraisers present the PACs as charities, suggesting they support veterans, firefighters or victims of deadly diseases, for instance. 

In fact, “scam PAC” operators and fundraisers are often old hands of the charity world, with a history of run-ins with regulators, state and federal records show. Some fundraisers work in both worlds, raising money for charities and PACs.

Reuters points out that when an organization operates as a political action committee, it is not subject to the laws governing charity fundraising. Normal charities generally must register with states, disclose their key employees and account for how the money is spent by providing information on how money is spent. That is not true for scam PACs, which are shielded from laws governing charity fundraising.

Aggressive scam PAC telemarketers face lower risk of scrutiny or sanction when engage in PAC fundraising. In essence, it is easy to wrap and hide a political PAC in a real charity.

Reuters that some fundraising companies and PACs constituted a “money-making force, with some ranking near the top fundraisers in the period stretching from January 2017 through mid-2019.” Scam PACs raise $83.1 million during the 2 ½ year period that Reuters analyzed. About 82% of that went to eight fundraising companies. Less than 10%, usually winds up going to any actual political candidate, so these organizations are essentially legal fraud operations. As usual, laws do not require transparency, so the scammers do not have to be honest about what people are donating their money to.

File this one under: Legalized sleaze, protected by law

Addendum: One can go online to see if a charity is legit and how much of a donation actually goes to the cause.

Charity Watch is one site for info in charities: https://www.charitywatch.org/

Charity Navigator is another: https://www.charitynavigator.org/