A ProPublica investigation has uncovered a network of at least 10 political nonprofits, known as 527 groups, that have raised more than $33 million on the promise of supporting admirable causes but have spent little on activities related to their stated political purposes. Instead, the majority of the money goes to fundraisers who have only been paid by 527s within the identified group.
These organizations, with names like American Breast Cancer Coalition and National Coalition for Disabled Veterans, appear to be funneling more than 90% of donations to fundraisers. The investigation connected Thomas Berkenbush, a former co-manager at Outreach Calling, a notorious telemarketing company sued by the Federal Trade Commission (FTC) in 2020, to this network of 527 groups.
Despite being banned from charitable fundraising for life as part of the FTC settlement, Berkenbush’s new company, Office Edge LLC, has received about $866,000 for fundraising from organizations claiming to work on behalf of cancer patients, veterans, and firefighters. The difference is that these groups are political nonprofits, not charities, allowing them to skirt the FTC’s ban.
Experts attribute the lack of oversight and enforcement of these 527 groups to the difficulty in accessing records published by the IRS and the agency’s limited resources. The investigation also revealed connections between the groups, including similar website designs, shared payment systems, overlapping donors and contractors, and nearly identical language in IRS filings.
One donor, Laurence Eggers, who has given at least $1,500 to the American Breast Cancer Coalition over the past three years, expressed disappointment upon learning that the organizations he supported used almost none of the funds for their stated purposes. “I feel like I’m being used and they’re being abused,” he said, referring to those he aimed to help with his donations.
The investigation also linked Alan Bohms, who has previously paid Outreach Calling millions to fundraise for his nonprofit, to the network. Bohms and his companies have received close to $1.5 million from the identified nonprofits. Bohms defended the money spent on fundraising, claiming that phone calls are central to educating and engaging the community about the groups’ missions and objectives.
As the investigation sheds light on the practices of these 527 groups, it raises concerns about the lack of transparency and oversight in political nonprofit fundraising. The revelations highlight the need for increased scrutiny and enforcement by federal agencies to ensure that donor funds are being used for their intended purposes and not simply enriching fundraisers at the expense of the causes they claim to support.
Credit: Propublica
