Penny Fraud
Ever dropped a coin or a rolled up bill in jug as you walked down the street? The UHO has tables and donation jugs set up in some of Manhattans busiest spots (Union Square, Times Square, etc.) with exceptionally vocal attendants to solicite donations for homeless services like detox, food and clothes. Well it turns out, as I’ve always suspected, the UHO is a scam.
The Attorney General of NY Andrew Cuomo has charged the organization with fraud, accusing its President, Stephen Riley, and its director, Myra Walker, of using organizational proceeds for personal expenses like meals, GameStop, HSN and WeightWatchers. The organization charges an attendant (usually the formerly homeless) $15 per shift to rent the table, jug and use of the UHO name. After the attendant pays the $15, they’re free to keep the rest of the “donations.” So perhaps you did help someone, but definitely not as you intended to. The UHO has served for years as a cloak organization to effectively panhandle under the guise that donations would help many homeless New Yorkers. Sadly the buck didn’t get far from the table (unless it went to the GameStop tab). The organization never owned a soup kitchen, shelter or detox center and has never contributed to another homeless organization.
This goes to show how a twisted entrepreneur can warp a nonprofit into a scheme and more-so how the donating public let’s them get away with it. With an organization like the UHO, there is absolutely no means of measuring the impact they had on the homeless population and no way of showing where and how donations were used. Why didn’t they have such basic impact strategies? Because no one asked. The people who dumped coins in a jug, never asked for the valid information. It may have been $.15 or a $1 each but that is money that could have gone to a person in genuine need.
The public must demand results. We must demand a measurable impact from the organizations that we donate to. If you simply donate blindly you might as well throw your loose change in the trash (or into the hands of the bum on your street). No one should take the perspective of a donor, we must adopt the perspective of the investor. Giving money to any organization demands due diligence to see how that organization translates that contribution into action. The same due diligence that shareholders expect in corporations. Until we take two seconds to research before we give 2 cents, we will continue to divert millions of dollars into scams instead of legitimately beneficial organizations. In the meantime, we can all be glad these guys are off our streets.
References:
http://www.nytimes.com/2009/11/25/nyregion/25homeless.html
