End Homelessness

Bluster and Indignation after Alleged NYC Charity Scam

by Noah Jennings

category: Government

Published November 26, 2009 @ 10:35AM PT

• 6726 Views

There's something off about the recent vilification of a homeless charity in New York City.

State attorney general Anthony M. Cuomo filed suit this week against the United Homeless Organization alleging fraud.  Cuomo accuses the organization of taking advantage of "the good intentions of people who thought that their charitable donations were helping to fund services for the homeless...instead, their donations go directly to U.H.O.'s principals and workers, who abused the organization's tax-exempt status to line their own pockets."

If you live in NYC, you know that these "workers" are the homeless who stand at a table with a bucket and the U.H.O. sign asking for donations. Here's how it breaks down, according to one homeless man who works the tables, "I only get about $25 a day. I give them (UHO) $15 and I keep $10 for myself. It's not that much money." Supposedly, this $15 went to advocacy and treatment programs for the homeless. But this turns out not to be the case.

New Yorkers are in uproar, if the dozens of pieces on the scandal are to be believed. The blogging keyboard brigade wants blood. "Lowest Scam in Town," blares the headline of an editorial in the New York Daily News. "The UHO hucksters are still out there," NYD writes, "so we appeal to all good-hearted New Yorkers. Yell the word 'fraud' as you pass them by." Yes, and put the homeless working the tables in irons and sack cloth too. Probably these exposed homeless feel only 65% shame as it is. The whole public scourging thing would ratchet that up to a very nice 99%. NYC compassion is legendary for a reason.

But if those who run U.H.O. are guilty of something, it's only bad book keeping. Though they should have advertised themselves as an organization that primarily gives money to the homeless, what they're accused of is really not very different from the work of many non-profits. Gasp in surprise all you want, but check out the tax returns of any homeless service organization on a vetting site like Guide Star. What you'll find is that the lion's share of an organization's revenue goes to compensation, including benefits, pension and related taxes. Maybe a third goes to operational expenses.

If you consider those working the tables for U.H.O. to be clients rather than employees, and if we believe the above example to be accurate ($25 collected, $15 to organization, $10 to client), then U.H.O.'s balance sheet isn't that different from, say, a large NYC homeless services organization like Urban Pathways. 60% of UHO's revenue went to the compensation of their administration, the rest went to the homeless. Better than average, if it's important to you that a charity get its money to those who need it. And if you break down the alleged $173,000 collected by the two leaders of the organization in the last 4 years, that breaks down to about $22,000 each in yearly salaries. Hardly a high dollar wage.

What this supposed scandal reveals isn't the crime of a visible charity. What's laid bare are some ugly beliefs about the homeless. It reflects a wholly inaccurate claim, that the homeless are largely cons and criminals. Cuomo and those who echo him voice the very worst public sentiment about homelessness, that those who suffer from it are to be feared and suspected, watched closely. This is an irresponsible and indefensible view. Hate crimes against the homeless are on the rise and tearing down U.H.O. can only fuel this trend.

U.H.O. broke the law. They deceived the public. There's no doubt about that. But this story is a distraction. Better to do something about housing NYC's 39,000 homeless instead.

Image courtesy of www.thelmagazine.com