LOS ANGELES (CN) - Slammed in one article as one of the worst charities, Children's Wish Foundation gives only a small fraction of the funds it collects to needy children, a federal class claims.
Not to be confused with the Make a Wish Foundation of Arizona, the defendant Children's Wish Foundation International (CWFI) is based in Georgia and holds itself out as a charity for children with life-threatening diseases.
Jesse Unruh, of Los Angeles, notes that CNN, the Center for Investigative Reporting and the Tampa Bay Times called the charity America's third worst charity, behind Kids Wish Network and Cancer Fund of America.
In the last 10 years, less than 11 percent of the $96.8 million contributed to the charity has been given to children as direct aid, according to the complaint.
"Instead of the millions of dollars raised in the name of sick, dying, and needy children going to direct relief and aid, the vast majority of the millions raised goes to defendant CWFI's operators and the for-profit companies," the complaint states.
The 14-page lawsuit estimates that the charity spent $600,000 on "wishes" for children and donated $3 million in goods but spent $6 million on fundraisers to solicit the donations.
"Perhaps even more egregious, founder and Executive Director Linda Dozoretz of defendant CWFI took an annual salary of more than a quarter million dollars in 2010," the complaint states.
Unruh says he "reasonably relied" on the charity's representations when he made a contribution and expected that it would "directly aid children in need."
The class seeks at least $5 million in damages for false advertising and unfair competition.
After studying 10 years' worth of federal tax returns, the Tampa Bay Times reported that, of the $127.8 million Kids Wish Network raised, $109.8 million was spent to solicit donations, with 2.5 percent spent on direct cash aid. Cancer Fund of America raised $98 million, spent $80.4 million on fundraisers and 0.9 percent on aid, the paper said.
The class is represented by Michael Kelly with Kirtland & Packard of El Segundo, Calif.
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