Bearing Alms

Calls for truth in giving

An American tradition that goes back to community barn raisings three centuries ago, philanthropy is now big business, but is it always a truthful business? Cheerful givers usually know precious little about a sector of the economy that in 1978 claimed a record $39.6 billion--an average of $180 for every man, woman and child in the nation --for donations to the Red Cross, United Way, CARE, the March of Dimes and some 800,000 lesser organizations raising money in the name of charity.

To help donors learn more, Carl Bakal, a public relations executive and sometime social critic, has written Charity U.S.A., a $16.95 investigation into how the money is raised and where it goes. Says Bakal, explaining why he wrote the book: "Where the cause is noble, how the money is spent is never questioned. I don't want people to stop giving. I just thought questions should be answered because they were giving so blindly."

Bakal writes mostly of the $21.2 billion that pours into educational, cultural, health, social welfare, environmental and other nonreligious causes. Corporations give about 10% of the total. More than 80% of the donations come from individuals, who, Bakal concludes, are usually unaware, for instance, that an average of 21-c- of each charity dollar they give to health causes is spent on fund-raising costs and overhead. He notes that over the eleven-year period that ended in 1974, the Asthmatic Children's Foundation, according to Bakal, collected $9.9 million, but only about $1.4 million of that ever went to research and the treatment of sick children. The rest was swallowed by overhead.

Bakal chronicles some of the well-known charity deceptions that gulled the generous. Baltimore's Pallottine Fathers, a missionary order, collected about $56 million between 1970 and 1975 to feed and clothe the poor but spent much of it on Florida real estate. Nebraska's Boys Town eagerly solicited funds after it built up a net worth of well over $200 million and an income from investments that was easily enough to cover operating expenses.

Charities, Bakal argues, should be subject to some truth-in-giving regulation. He charges that, in its fund-raising appeals, the Red Cross often avoids mentioning that it helps servicemen with financial aid and counseling. Instead, the organization promotes its more popular activities, notably disaster relief.

Bakal also takes aim at the United Way, the nation's largest fund raiser; it collects more than $1 billion annually and aims to triple the total by 1985. Most of the money comes from payroll deductions. Bakal cites evidence that some companies strongly pressured their employees to donate their "fair share." A Pacific Telephone & Telegraph executive, he says, threatened to deny raises to those who would not contribute; Ohio Bell Telephone recorded the names of those who canceled or reduced their pledges; Northwestern Bell Telephone workers were told by supervisors and union stewards how much to give.

In riposte, William Aramony, the head of the United Way, accuses Charity U.S.A. of being superficial and doing "a disservice to all philanthropy." Other critics charge that Bakal is out of date. Two of his main conclusions are shaky. He suggests that a new federal agency should regulate charity much the way that the Securities and Exchange Commission regulates securities transactions. He also believes that most functions of philanthropy should be taken over by the Government. Few taxpayers will agree that the U.S. needs another bureaucracy or more federal spending. For all the book's flaws, anyone who has the stamina and sharp eyesight to get through 459 pages closely set in tiny type will rightly demand to know more about what his favorite charity is doing with his hard-earned dollars before he writes another check.

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