The Cancer Fund of America, a Tennessee-based nonprofit listed by the Tampa Bay Times as America’s second worst charity, has agreed to shut down. The move is the result of a first-of-its-kind lawsuit filed by not only the Federal Trade Commission (FTC), but over 58 other law enforcement agencies from all 50 states.
The Cancer Fund of America is the flagship “charity” run by James Reynolds, who for over twenty years has used accounting tricks, deceptive branding and marketing, and outright lies to hide how much money the nonprofits make—and how little goes to those it purports to help.
Ostensibly, the Cancer Fund of America, along with other spin-off charities run by members of the Reynolds family, rose millions every year in order to provide direct aid to families affected by cancer. Businesses were encouraged to donate clothes, tools, sanitary items, and more, which were turned into gift baskets of supplies that would be sent to those in need. This would be a noble goal and a good approach, except that only lip service, if that, was given to the objective. Between 2008 and 2012, Cancer Fund of America raised over $187 million from donors across the country. Of this money, less than $560,000 went to cancer patients and their families. Most went to paying solicitation companies to acquire more donations and the rest went in the family’s pockets courtesy of exorbitant executive salaries.
As the lawsuit noted, this turns from mismanagement into outright fraud when the Reynolds began to use donor money for blatantly personal purposes. This includes trips to Las Vegas and Disney World, gym memberships, subscriptions to dating websites, cars, meals at Hooters, and concert tickets.
The fraudulent programs donors thought they were funding included “urgently needed” pain medication, transportation to chemotherapy appointments, providing groceries and utilities to patients, and grants for hospice care. These programs were either grossly exaggerated—the pain medicine was just over-the-counter ibuprofen—out simply nonexistent.
When the Fund bothered to act on its mission statement, it did so with minimal effort by sending seemingly random and barely useful assortments of items. Its gift baskets were prepackaged by staff using whatever donations were available and sent out regardless of a patient’s age, gender, clothing size, or preferences. Typical contents included Instant Breakfast drink, adult-sized underwear and bed pads, and what the charity described as “comfort items”—a category that apparently meant sample-sized soaps and other toiletries, snack cakes, paper plates and plastic cutlery, family DvDs, iPod covers, coloring books, blank greeting cards, and other miscellaneous items.
These actions by the Fund did not go unnoticed by regulators. Since as early as 1992, the Cancer Fund of America and other Reynolds nonprofits has been the subject of fines and lawsuits from various bodies. In each instance, the fines were paid, minimal or no guilt was admitted, and the group carried on.
The lawsuit, which was launched in 2015, is the first time every state has joined with the federal government to sue what it deems a fraudulent charity. The settlement agreement in which the Reynolds family shuts down their operations still requires the attorney general to sign off, but hopefully means an end to this family’s decades of deceit and diversion of money that could have gone to much more worthy causes.
Sources for Today’s Article:
FTC, 50 States, and D.C. v. Cancer Fund of America, Inc., et al. Complaint, Page 26 of 148. https://www.ftc.gov/system/files/documents/cases/150519cancerfundcmpt.pdf.
“FTC, All 50 States and D.C. Charge Four Cancer Charities With Bilking Over $187 Million from Consumers,” Federal Trade Commission web site, May 19, 2015;
https://www.ftc.gov/news-events/press-releases/2015/05/ftc-all-50-states-dc-charge-four-cancer-charities-bilking-over, last accessed February 18, 2016.