We're getting a lot of questions about Wyclef Jean's charity as several sources are starting to raise questions about it.
First off, we do not yet rate this charity as it currently doesn't meet our criteria. Why? It has only filed three Forms 990 and we require at least 4 to complete a rating.
Second, our team has taken a look at what information is available on this group.
- We find it odd that the charity filed all three 990s (for fiscal years 2005, 2006 and 2007) in August of 2009. Charities are often not especially timely in filing these documents, but this is beyond late.
- According to the group's FYE 2008 audit (the corresponding 990 isn't available at this time) the group spent 69% of its budget on programs. Our research shows that the most efficient charities spend at least 75%.
- Just about all of its program expenses are providing grants to its affiliate organization in Haiti. There is nothing wrong with that, but we really don't know how the group in Haiti spends its money.
- One of our recommendations is that donors stick with charities that have experience in providing aid after major disasters and/or that have a long history of working in Haiti. The group may meet the second criteria, but it doesn't appear to meet the first.
At the end of the day, this charity is going to bring in a ton of money because of its affiliated star power. Already it has raised $1.5 million! It is critical that we all- from the media to nonprofit experts to donors - closely watch how it handles all of these new donations. Will it spend the money on its own programs and services? And does that mean it will help with the medium to long term recovery efforts or will it try to provide immediate aid? Will it simply funnel it to other groups -and if so, will it that diminish how much makes it to other organizations?
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You can read CNN's take on the story online here.