Wish-granting nonprofit spends little on goal
METAIRIE (AP) — Wishing Well Foundation USA, based in Metairie, claims to grant wishes to terminally ill children. But of the $1.15 million it raised last year, its tax records show only $16,497 was spent on wishes, 1.4 percent.
The nonprofit’s tax filings going back for more than a decade show a similar distribution of donations, with minimal documentation on the granted wishes. Although the now-retired head of Wishing Well was pocketing a sizeable salary over the years, the real beneficiaries of the fundraising efforts were the telemarketing firms tasked with soliciting donors.
Authorities say there’s nothing illegal about the practice.
For 2013, out-of-state telemarketers received $906,860 from Wishing Well, and $160,024 went to salaries, employee benefits and other compensation. Former president Elwin LeBeau, who could not be reached for this story, is listed as making $62,400.
Wishing Well’s attorney, Matthew Brown of the firm Sullivan Stolier Knight in New Orleans, said Wishing Well is working to bring more fundraising in house. The problem, he said, is that the telemarketing firms Wishing Well hires keep most of the money raised.
The practice is not rare, said Matthew Mullenix, vice president and interim CEO of Louisiana Association of Nonprofit Organizations.
“There is generally an impression that it (fundraising ratios) ought to be 100 percent. It’s an understandable impression but not how a nonprofit works,” Mullenix said. “It’s a huge challenge for nonprofits to get the word out for what they do.”
Using telemarketers is “sort of a necessary evil,” Brown said.
“It’s often the most reliable source of funding that they’ve had,” he said, referring to Wishing Well’s history.
Wishing Well paid four telemarketing companies last year to solicit donors: Community Relations of Kansas, $418,978; Telenet and Associates of Illinois, $233,619; JEK Marketing and Associates of New York, $151,191; and T&T Rettig of Arizona, $103,072.
“We give them more than anyone else would,” said John Records, a manager at Community Relations, which returned about 15 percent of the money it raised for Wishing Well. He contends that prominent nonprofits that raise funds in-house don’t always record their fundraising-to-spending correctly.
Last year wasn’t the first time Wishing Well has spent such a vast amount of its income on telemarketers and employee salaries.
From 2002 to 2012, of the $13.5 million Wishing Well raised, $10.7 million was paid to solicitors, $1.48 million toward salaries and $582,950 toward aid, or 4.3 percent.
“It doesn’t surprise me that they are seeing those results. What surprises me is that they haven’t sought other methods,” said Cory Sparks, New Orleans field office director for LANO. “Why would you continue to pursue this?”
Wishing Well is trying to restructure its contracts with some of the telemarketing firms, Brown said, adding that its new director might try to bring some fundraising activities to the greater New Orleans area rather than farm the work out.
“They’ve (staff of Wishing Well) been in a little bit of a period of transition,” Brown said. “To the extent that, they’ll do more things without fundraisers, they’ll try.”
Robin Withers, who previously worked under LeBeau at the foundation, took over last year as Wishing Well’s new president. She declined to be interviewed for this story.
This is not the first time Brown has told reporters that Wishing Well was changing its fundraising methods. The newsletter for the nonprofit watchdog American Institute of Philanthropy reported Brown making a similar statement in 1999 after the Minnesota Attorney General sued Wishing Well and one of its fundraisers for fraud. Wishing Well settled the suit without admitting fault by paying about $60,000.
Brown told CityBusiness that Wishing Well’s recent granted wishes included giving an iPad to a 5-year-old child with cerebral palsy, sending a wheelchair-bound 13-year-old with neuromuscular disease on a cruise and providing a kayaking trip to a 12-year old with an inherited connective tissue disorder.
According to Wishing Well’s IRS Form 990 from tax year 2012, three wishes were granted. The listed expenses were $3,041 to buy items for an 8-year-old boy’s bedroom; $6,060 to send a 12-year-old boy and his family to Disneyland; and $7,396 for a Disney World trip for an 8-year-old girl and her family.
The 2012 Form 990 and most others dating back to 2002 do not include names or addresses of the wish recipients. Brown was asked by email last week for information to verify that the wishes had in fact been granted. He replied that he would “check on what we can release” but has not since responded.
According to the Louisiana Attorney General, there is nothing illegal about Wishing Well’s practices as long as it can show some of the money it raises goes to its central mission. Laura Gerdes Colligan, public outreach manager at Louisiana Department of Justice, said the attorney general’s office has not received any complaints about Wishing Well and has never investigated the nonprofit.
Compared to Wishing Well’s minimal spending on its stated goal, the nonprofit Make-a-Wish spent 67 percent of the grants and contributions it raised last year on wish activities, with $38.9 million of the $57.7 million collected going toward wishes.
Local nonprofit Animal Rescue New Orleans spent $176,512 of its $195,041 — or more than 90 percent of its revenue — on services such as veterinary care, shelter fees and animal transport, according to its most recent tax filing.