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Charity with Large Assets Reserves

Pleads Poverty

- published in the August 2005 issue of the Charity Rating Guide & Watchdog Report

In 2003, a number of AIP members received a direct mail solicitation from Asian Relief, which also uses the name World Villages for Children, that cries desperation. The letter signed by Sister Michaela Kim, Director of World Villages for Children, includes a nickel and dime scotch-taped to the top and begins as follows:

Dear Friend,
I am forwarding to you this nickel and dime because I am desperate, and must take the risk that some folks may choose not to send the coins back to me.
But I am facing the greatest crisis in my life. Please let me explain:
My name is Sister Michaela and the terrible poverty here in Guatemala is forcing me to say “no” to the precious girls and boys who desperately need to be accepted into our Children’s Village here in Guatemala – like the ones you see pictured with me.
But how can I raise the money, with the current recession and difficult economic times in Guatemala? I wake up in the middle of the night fearful that I may have to even tell some of my children that I can no longer help them.

In the same year that this desperate appeal for funds was mailed out, Asian Relief had an unrestricted fund balance of $33.5 million, total income of $16 million and only spent $2.3 million or 20% of contributions it received on caring for children. Asian Relief’s only other program in 2003, on which it spent $2.9 million, is described in its tax form: “To promote and educate our donors and potential donors of the socio-economic plight of the poor….” Nowhere in this charity’s solicitation does it say that money is being raised to educate donors on the plight of the poor or that more money would be spent on donor education than on helping children. The only suggestion that funds will be used for purposes other than caring for children is on the charity’s response coupon, which says, “I confirm that you are free to use my gift to help feed, care for and educate your children in Guatemala or for any other purpose of World Villages for Children as you think fit.”

AIP feels strongly that Asian Relief’s solicitation is inappropriate in light of the charity’s substantial assets and places too much pressure on the donor. It is wrong for Asian Relief to say that children “have no hope for the future” unless they can get help from their charity. Maybe another charity operating in Guatemala, the local government, or a family member will provide help instead. Many millions of children in the developing world will continue to suffer for the foreseeable future whether or not an individual responds to Asian Relief’s appeal. Donors should be wary of any charity that attempts to scare you by making you feel personally responsible for a problem. Such charities are preying on your emotions so that you may not be able to rationally make a giving decision.

Asian Relief’s coins taped to the letter and live postage are a manipulative tactic used by charities to make you feel obligated to return these items with a contribution. Charities know that many people will feel like they are taking from the poor and needy if they pocket the coins or keep the stamps. Charities that make use of such gimmicks tend to have higher fundraising costs. Donors who send money in response to such devices need only feel guilty for squandering their charitable dollars on inefficient groups. Asian Relief’s web site, www.worldvillages.org, states that it mails coins to gain attention and increase the likelihood that people will read the letter, and also make people aware “that it takes only a small amount of money to help a child break free from a life of poverty….”

Another suspect tactic in Asian Relief's solicitation is the use of twelve celebrity "sponsors," most of whom are deceased, including Jimmy Stewart, Jonas E. Salk, M.D., Henry Mancini, and Roger Staubach. The solicitation does not identify what it means to be a sponsor. Donors should be careful to not assume that these famous people are endorsing this charity. In response to AIP’s question concerning whether Jimmy Stewart had ever sponsored this charity, Gregory M. Paul, Vice President of The Stewart Family, LLC wrote in a letter to the charity that neither Mr. Stewart nor his family have ever given consent to use his name and persona as a “ ‘sponsor’ of Asian Relief / World Villages for Children.” His letter went on to demand that this charity not make use of Mr. Stewart’s name or persona in its fundraising.

Asian Relief’s most recently available tax forms (2001 to 2003) each leave off the names of its officers, directors, trustees, key staff and five highest paid employees, which is a violation of IRS reporting rules. Instead, the forms state that the information is “available upon request.” However, when AIP contacted Asian Relief, they were not forthcoming with this information. In 2003, this charity responded to our request for this information on 2001 finances. They list five officers and directors: J. (Joseph) Vita, the only paid officer; his mother D. (Dolores) Vita; and three nuns, including Sister Michaela Kim.

AIP repeatedly tried to speak with an official from Asian Relief in June 2005, but they were not available for comment and did not return messages. The charity also did not respond to our requests for recent financial information or board of directors’ contact information. According to the charity’s tax form, they have not filed this information in any state. Many states require that charities file an audit in addition to the IRS form 990, but exempt religious organizations from this requirement. Asian Relief says in its solicitations that it is a “nonsectarian” organization, yet hides behind its state religious exemption when it comes to being accountable.

Asian Relief clearly has religious connections. A missionary priest, Msgr. Aloysius Schwartz, founded World Villages for Children in 1964, according to the charity’s web site. He also founded the religious congregation of the Sisters of Mary to manage the children’s programs in the Philippines, Korea, Mexico, Guatemala and Brazil. The end of the fundraising section of Asian Relief’s web site says, “…with your year-end gift, you are doing more than just investing in a bright future for poor children under our care. At the same time, our children are giving you an opportunity to prepare a lasting home for yourself in heaven.”

 
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