10 News Investigators: Veterans Support Organization (VSO) not helping many veterans

10:43 PM, Dec 19, 2011   |    comments
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ST. PETERSBURG, Florida - It may leave you with a holly jolly feeling inside, but your cash donation to a non-profit soliciting in local malls may be nothing more than a handout to professional panhandlers.

A 10 News viewer reached out to the Investigators, concerned about solicitors dressed like military veterans approaching people - with permission - at the Tyrone Square Mall.  He wanted WTSP to investigate the legitimacy of the Veterans Support Organization (VSO). 

The group, which solicits at grocery stores, Walmarts, and intersections throughout the year, claims to help veterans across the U.S. During November and December, it negotiates for space in local malls, often collecting upwards of $1,000 a day from holiday shoppers.

But the VSO's most recently-submitted IRS documents reveal only 6.6 percent of the group's $5.7 million in revenues go toward the grants and veteran assistance programs they tout to donors. 

Last year, the group's founder, Richard Van Houten, kept 4.4 percent of revenue himself. he earned a salary of $255,698. 

The VSO also spent $240,995 on office expenses, $154,332 on travel, and $71,860 on uniforms for solicitors. 

It spent over $1.1 million on "other salaries," presumably for many of the people who solicit donations. A prominent community activist in Tampa tells the 10 News Investigators that workers get to keep 30 percent of daily donations.  He called the group "professional panhandlers." 

The VSO only responded to 10 News' request for an interview with a brochure and a short statement about its filing with the state of Florida about dedicating 86 percent of revenue to programs, including a 115-bed housing facility for veterans in South Florida. But a spokesman for the American Institute of Philanthropy (AIP) said the VSO's IRS filings raise a lot of red flags.

"The charity is reporting zero fundraising expenses," noted the AIP's Laurie Styron. "The charity is claiming that expenses like $151,300 in 'solicitation location fees,' $1,747,010 in 'solicitor pay and payroll taxes,' and $84,785 in 'solicitors travel' expenses are somehow related to its programs.

"This charity is a great example of why taking a charity's reported figures at face value does not get to the heart of what most donors really want to know...if I donate $100 to this charity, how much of it will be used on programs to help veterans?"

"I doubt most donors would consider solicitor-related expenses of nearly $2 million to be the type of 'program' for veterans they are intending to support."

Styron also points out $635,815 on "occupancy" expenses, even though an audit revealed the non-profit entered into a co-purchase agreement/investment with one of its board members for shared office space.

State records indicate more problems with the VSO's solicitations; its permit to solicit in Florida was never renewed when it expired in November.

Where's my donation going?

It can be tough to tell good charities from bad ones since the IRS only reviewed 0.5 percent of all U.S. non-profits' tax returns last year. But 10 News has compiled some tips:

  1. First, find out if the organization currently has non-profit status with the IRS
  2. Review the group's Form 990 tax filings for free on Guidestar.org to learn about its revenues, salaries, fundraising costs, and board of directors.
  3. Look for red flags, such as high salaries, board members receiving salaries, board of directors or employees related to each other, or high fundraising expenses in relation to revenue.
  4. Use charity watchdog websites such as:
    1. The American Institute of Philanthropy
    2. The Better Business Bureau's Wise Giving Alliance
    3. The Charity Navigator
    4. Givewell.org
  5. You can also call a non-profit to ask specific questions about how their funds are being spent.  Most organizations that aren't religious groups are required to provide their last three 990s upon request.

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