The Hypocri$y of Non-Profit$

Christmas, the season of giving, is rapidly approaching, and workers earning poverty level wages with no benefits or any job security are busy at work processing the annual flood of donations to charitable organizations and non-profits. The good intentions of donors notwithstanding, like using a band-aid to treat cancer, charity is incapable of any fundamental social change, incapacitated as it is by the socio-economic system in which it operates. Unbeknownst to many donors is how these same organizations perpetuate and profit from the very social ailments they are supposedly on a mission to end, a consequence of the non-profit industrial complex.

It is no secret that billionaire philanthropic organizations are corporate entities masquerading as charities. Even by capitalist standards one can hardly claim that an organization like the Bill and Melinda Gates Foundation, whose questionable charitable activities are far surpassed by its investments in virtually every industry, is anything other than a corporation. With investments in private prison companies and mercenary firms to transnational oil and gas, chemical, food, construction, pharmaceutical, and retail corporations, the foundation profits from the most violent and destructive exploitation of working people and the environment that exists today, including war.

Yet hidden from the public eye through effective marketing schemes and social taboos is the anti-working class activities of public non-profit organizations. To a lesser degree, though not always by very much, these charities likewise suffer from the same contradiction between their highly publicized objectives and their less publicized quest for more wealth, power, and privilege.

These contradictions are especially evident in cancer research organizations and anti-poverty charities. The American Cancer Society (ACS), The Salvation Army, United Way, and World Vision are among the largest and wealthiest non-profits in the world, and their business practices, especially those of the ACS, The Salvation Army, and United Way, more closely resemble for-profit corporations than charities.

Despite incessant solicitations for more donations, none of the aforementioned non-profits are hurting for cash. In 2015 the ACS reported $919 million in revenue and more than $1.2 billion in cash, investments and real estate assets. According to Forbes, the reported revenue of The Salvation Army, United Way, and World Vision for 2014 are $4.1 billion, $4.1 billion, and $1 billion respectively. For comparison, the annual revenue of United Way and The Salvation Army both exceed that of Bose, the electronics manufacturer, Hallmark Cards, and Payless Holdings, the shoe retailer.

A large revenue is not itself a problem for a non-profit if it uses it for the sick, needy, and hungry, but do they? Not always, it seems. In 1992, the Chronicle for Philanthropy criticized the ACS for being “more interested in accumulating wealth than in saving lives.” A meager 26% of the money raised by the ACS was spent on cancer research in 1988, with its narrow focus on highly profitable cures rather than prevention. Over 60% went to “generous salaries, pensions, executive benefits, and overhead,” a staggering amount of money considering the society’s then $400 million budget. Former CEO of the ACS, John Seffrin, brought home more than $2.2 million in total compensation in 2010, and the current annual salary of the CEO, according to Forbes, is over $1.4 million.

Far from being an isolated incident such obscene levels of corruption and mismanagement of funds is found in all major charities. Four cancer charities – the Cancer Fund of America, the Breast Cancer Society, the Children’s Cancer Fund of America, and Cancer Support Services – were charged with fraud for conning donors out of $187 million between 2008 and 2012. Donations “were used to pay for vehicles, personal consumer goods, college tuition, gym memberships, Jet Ski outings, dating website subscriptions, luxury cruises, and tickets to concerts and professional sporting events.” In 1992, the long-time CEO of United Way, William Aramony, was forced to resign when it was discovered he used donations to fund his lavish lifestyle, which included overseas trips, $480,000 for a condo in New York’s Upper East Side, $78,000 in chauffeurs, and other expenses. Aramony was found guilty on 25 counts of felony charges, among them fraud, conspiracy and money-laundering, and for fraudulently diverting $1.2 million in donations to himself, his friends, and various women. Furthermore, like the ACS, the annual salary of the current CEO of United Way, Brian Gallagher, is $1.5 million. Here in Canada, the Canadian Cancer Society (CCS), with $150 million in revenue and $136 million in reserve according to Charity Intelligence, was criticized for spending more on fundraising and administration than on cancer research. In fact, CBC’s Marketplace reported that the proportion of money spent on cancer research actually decreased dramatically – by almost 50% – as more money was raised. “If current needs are not being met because of insufficient funds, as fund-raising appeals suggest,” Thomas DiLorenzo concluded in an article published by the Wall Street Journal, “why is so much cash being hoarded? Most contributors believe their donations are being used to fight cancer, not to accumulate financial reserves. More progress in the war against cancer would be made if they would divest some of their real estate holdings and use the proceeds – as well as a portion of their cash reserves – to provide more cancer services”[1].

More importantly, through anti-working class business practices and deep roots to transnational corporations, these same non-profits uphold the status quo and perpetuate the very social and environmental issues they claim to be addressing.

The corporate partners of the ACS, The Salvation Army, World Vision, and United Way is a who’s-who of the most exploitative and destructive corporations in the world, and the policies and practices of these non-profits reflect this. In the words of William Booth, the founder of The Salvation Army, a “philanthropic body cannot afford to alienate the class which supports it.

Nowhere in the post-WWII history of the ACS will you find evidence of the society’s dedication “to eliminating cancer as a major health problem by preventing cancer, saving lives, and diminishing suffering from cancer, through research, education, advocacy, and service,” as it says on the society’s website. Quite the opposite, in fact. During the early 1950s, for example, when British and American researchers were shedding light on the link between lung cancer and smoking, the ACS dragged its feet, refusing to support such important research. Seated on the society’s board of directors at the time was W. B. Lewis, vice-president of Liggett and Myers, one of the largest tobacco companies in the U.S. The ACS continues to ignore or reject research that links carcinogens to cancer, while some of the largest corporate donors include major junk food companies, arms, chemical, and pharmaceutical manufacturers. Not only does the ACS reject research, its “witch-hunts against alternative [cancer research] practitioners is in striking contrast to its extravagant and uncritical endorsement of conventional toxic chemotherapy.” A cheap, non-patentable alternative would, of course, negatively impact the profits of the society’s corporate sponsors.

World Vision, United Way, and The Salvation Army have equally questionable corporate partnerships. Corporate donors of one or more of the three include DOW Chemicals, manufacturer of Agent Orange and napalm; Du Pont, manufacturer of GMO seeds, plastics, and chemical weapons; ExxonMobil, the world’s largest oil company, with enough power and influence “to determine American foreign policy and the fate of entire nations”; Coca-Cola, a “strategic partner” of World Vision that has been charged with hiring armed paramilitaries to intimidate, kidnap, torture, and murder its own workers in Colombia that have been struggling for higher wages and better working conditions; Hershey, the chocolate manufacturer that profits from the use of child slave labour in Africa; Papa John’s Pizza, where franchise owners have been forced to pay back hundreds of thousands of dollars in stolen wages; and Walmart, which despite being the world’s largest company by revenue, pays wages so low workers are forced to depend on food stamps and other forms of public assistance to survive.

From its anti-union activities, refusal to adhere to pay equity laws and pay its employees the minimum wage, to its undemocratic, quasi-military structure, The Salvation Army – more accurately referred to as ‘The Starvation Army’ by members of the IWW – has historically and continues to take the side of big business in opposing meaningful social reform that would lift workers out of poverty. Founded by William and Catherine Booth in 1865, the Army’s mission was to spread Christianity and banish alcoholism, atheism, and anarchy – the three A’s. Only when Booth realized he would never convert the poor to Christianity if they were starving did the Army begin to provide social services. What was important to Booth was not “whether a man died in the poorhouse but if his soul was saved.” Needless to say, Booth opposed any kind of social transformation by the working class to end poverty and exploitation. Catherine Booth best summed up the role of the Army in a speech to wealthy donors: it is “the only organization whose members to any appreciable extent buttonhole the dangerous classes on their own ground and turn them away from anarchy, infidelity and socialism.”

Although the Army most famously clashed with the IWW throughout the early 20th century, more recently, in Canada, Australia, and the U.S., Army workers have went out on strike for wage increases, pay equity, and for the right to live their lives without the Army’s puritanical restrictions. In 1999, members of the BC Government and Service Employees’ Union (BCGEU) picketed for three weeks against the “lifestyle” clause, requiring workers to refrain from premarital sex, homosexuality, drugs, alcohol, and gambling during and after work hours. During the 1990s, the Ontario Public Service Employees Union (OPSEU) won two injunctions against the Army: one mandating that the Army adhere to pay equity laws, which, despite the injunction, the Army refused to do until 2001, and a second one ordering the Army to cease its unlawful surveillance and interception of union members’ communication and intimidating, threatening, and coercing strikers. Also in 1990, the U.S. Labor Department ordered the Army to pay 50,000 of its employees the minimum wage. Rather than accept the ruling the Army fought back by suing the Labor Department. In Australia, the Army’s crimes range from contributing to British colonialism and the genocide of Aboriginal people, refusing to negotiate with its unionized workers, implying that gays should be put to death, to widespread sexual abuse of children, in which a royal commission found that boys would be taken to bathrooms and abused at night, entrenching a culture of abuse in Army homes.

While doing everything possible to oppose any improvements in the lives of working people, at least 44 of the Army’s top staff members earn an annual salary of $100,000 or more, including more than $259,000 for the CEO. Meanwhile, the average Canadian and American worker earned $49,000 and $44,600 respectively as of 2014.

A non-profit organization, funded by major transnational corporations which refuse to pay a wage high enough for their own workers to survive, and that itself resists such fundamental labour laws as pay equity and the minimum wage, is fundamentally at odds with the slogan “Doing the Most Good” and the mission “to feed, to clothe, to comfort, to care.”

As the systemic crisis of capitalism continues unabated with all of its consequences – the unprecedented increase in part-time, precarious work, the dismantling of unemployment insurance, medicare, and public education, and the drive to war – working people need real, fundamental change, not charity.

[1] Cancer-gate: How to Win the Losing Cancer War by Samuel S. Epstein, P.81

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