Oklahoma City-based Feed the Children charity owns Burbank home

Watchdog group says $1.2M home to lure celebrities may get Feed The Children in tax trouble

A charity known for its heart-wrenching appeals for funds to feed starving children spent $1.2 million in donations on a house a few miles from Hollywood, an investigation by The Oklahoman found.

Feed The Children, an Oklahoma City-based Christian relief organization, bought the new four-bedroom house in Burbank, Calif., in May 2007, records show. The daughter of the charity’s president then moved in, records show.

The daughter, Larri Sue Jones, 43, told police after a December break-in that Feed The Children owns the house but "since her parents founded the organization, she was given the residence to live in,” according to a police report.

The home’s existence came to light during the legal fight for control of the charity, which reports raising more than $1 billion in cash and gifts a year. The charity says it supplements more than 760,000 meals a day.

Feed The Children President Larry Jones said the house was bought "to start an operation on the West Coast to reach out to celebrities.” He called it a combination residence and office.

"I have no regrets,” Larry Jones said in a statement given to The Oklahoman before he left on a trip to Africa.

"The relationship forged with several celebrities who embrace our mission at Feed The Children has made it possible to feed more children,” he wrote. "Celebrities open doors for us to raise in-kind and monetary gifts.”

Larry Jones said his daughter "lived and worked out of the house as intended.”

‘It’s not necessary’
The daughter is a vice president and an attorney for the charity. She has been at odds with her father during the legal fight.
"It was much more economical and, frankly, a better use of funds to buy a house than try to rent or buy an office as well as a house,” Larry Jones said.

He said the home was bought "from funds we raised to help expand the reach and opportunity of our ministry.”

A critic of the charity, Daniel Borochoff, president of the American Institute of Philanthropy, said the charity could get in serious trouble with the Internal Revenue Service for buying the home.

"It is a ridiculous use of charitable money. ... It’s not necessary. ... It’s an outrage that this kind of thing should be going on,” Borochoff said.

"Like everyone else, I am disappointed in the collapse of the real estate market in California and other places,” Larry Jones said. "We intended to sell the home at some point for a sizeable profit and then buy a small office to house our West Coast operations. With that said, we know if we stay focused on our mission, the Lord will take care of everything else.”

He said Feed The Children’s board approved the home purchase after much consideration.

"We prayerfully considered this decision and, after doing so, we were at peace with it,” he said.

Celebrities involved with the charity include actors Dean Cain, Roger Moore, Shannon Elizabeth, Lou Gossett Jr. and Amy Brenneman.

Currently in Africa on behalf of Feed The Children are talk show host Montel Williams; "General Hospital” stars Anthony Geary and Kelly Monaco; "All My Children” actress Susan Lucci; and actors Erik Estrada, Christopher Massey of Nickelodeon’s "Zoey 101,” Kyle Massey of Disney’s "Cory in the House;” and Devon Werkheiser of Nickelodeon’s "Ned’s Declassified School Survival Guide,” the charity said Friday.

About the battled
The ongoing legal battle pits Larry Jones against the majority of Feed the Children’s board. The directors upset with Larry Jones complain his "freewheeling dominance” of decisions has hurt the charity.

They were preparing to force him to take a sabbatical, but in December he had them ousted from the board before they could act. A new board then fired key executives, including Jones’ daughter, who sided with the upset directors.

A judge later undid those changes — at least temporarily. Oklahoma County District Judge Patricia Parrish reinstated ousted directors and gave Larri Sue Jones and other executives their jobs back. The next hearing in the dispute is set for Aug. 14.

Larri Sue Jones could not be reached for comment. Her attorney declined comment.

The median price of a house in Burbank in 2007 was about $625,000, according to the U.S. Census Bureau. The median value of an Oklahoma house that year was about $95,000.

Among the board’s concerns were that Jones allegedly did not receive board approval for major purchasing commitments, including approximately $35 million per year for a “Television Buying Agreement,” and evidence of a son’s personal use of charitable resources.

FC, which has consistently received an F grade from AIP for low program spending and high fundraising costs, continues to receive a failing grade based on its 2007 tax form and audit, the most current available.

The charity claims on its web site that it spends 83% of its budget on its programs. What some donors may not realize is that hundreds of millions of dollars worth of donated goods are included in this high program percentage, some of which are “worthless to most people” according to one Oklahoma based charity, Mission Shawnee (MS).

FC receives a large share of its donations from its “corporate partners,” such as Avon, Frito-Lay, ADM Co., Coca-Cola, among a long list of other companies. Companies have incentive to give in-kind donations of what FC refers to on its web site as “unsaleables, overages, and dated products” to charities such as FC in exchange for the lucrative tax deductions such donations may generate. In fact, FC lists tax savings as the first reason companies should consider donating, touting that companies “can receive up to twice the cost of the products you donate,” and that FC works to “maximize benefits to your company.”

Unfortunately, not all of the items FC accepts and later distributes to its partner charities are in usable condition or appear to be worth the value that FC is placing on them. MS received a shipment from FC late last year that included 265 cases of canned goods, most of which were “severely dented or rusted,” or “without labels” and had to be thrown away, according to MS president, Dr. Robert Dawson. This shipment, which also included 1 pallet of containers, 72 cases of bottled water, 50 bags of flour, and 1 case of discount pharmacy cards, was valued by FC at $118,932.61, according to the “Certificate of Donation” FC provided to MS. This amount seemed extremely high to Dawson, who later contacted FC for a breakout of how the different items were valued. He discovered FC was valuing the pharmacy cards at “about $23 per card,” accounting for about $112,000 of the shipment’s total value, according to Dawson.

This is not the first time AIP has caught a charity using donated cards of questionable value to puff up its program percentage. Help Hospitalized Veterans (HHV) took credit for $18,750,000 worth of “phone cards” it received and passed through to its related charity Coalition to Salute America’s Heroes (CSAH) in fiscal 2006. These “phone cards,” which were distributed to overseas military personnel by CSAH, were not for soldiers to call home to their family but rather to make free calls for sports scores with ads provided by a company called EZ Scores. HHV and CSAH, who share the same president and founder, each counted $18,750,000 of the sports score cards as a contribution and program expense in their respective fiscal 2006 financial statements. These sports score cards and $2 million in donated public service airtime accounted for 85 percent of CSAH’s total program expenses reported in its 2006 financial statements.

Since FC does not purchase the donated goods that it distributes, nor does it pay to deliver goods to its recipient partner charities, donors who contribute to FC may be wondering what happens to their cash donations to the group. About 60% of FC’s cash was spent on “television and radio” and “direct mail” in 2007 according to the group’s audit reporting of the same year. AIP determined that in 2007 FC spent only 18-19% of its budget on its programs once noncash items are excluded.

******

From the Summer 1999 Watchdog Report

Feed the Children Execs Accused of Stealing Donated Supplies Intended for the Needy

After conducting a four-month investigation, WTVF, a Nashville television station, recently reported that it had secretly videotaped Feed the Children’s (FTC) Nashville front office “from the executive director on down” regularly taking boxes of donated goods. WTVF reported that “even family members [of FTC staff] got in on the action.” Warehouse workers, who tipped off WTVF about the alleged thefts, told that station that they saw staff takes boxes they believed were intended for Kosovar Refugees and Oklahoma Tornado Victims. The Associated Press reported that Tennessee Bureau of Investigation agents had raided the charity’s Nashville office and the homes of six administrative employees producing boxes of shoes, videos, blankets, food and other goods they believe were donated for the needy. “Merry Christmas to me” was written on one box according to the AP.

http://www.charitywatch.org/articles/feedchildren.html

" Answer: Because people are so damned corruptible. Just look at our government as an example. When you’re given other peoples’ money and resources to spend, use, distribute, etc., perspective and integrity seems to be lost in a fog of irresponsibility and greed and a tendancy to squander what isn’t your own. "

Bingo.

I was a kid living in OKC when this guy got his start.

Just sayin' for the sake of conversation, if we give him the benefit of the doubt and say he started out as a legitimate Christian charity, look how corrupt he became in time.

No accountability, no oversight, apparently no responsible financial peeps working for him, and what, 40 years later... look what he came to do "with enough rope".

Another study in human nature and religious exploitation, (have we seen this show before?) and all the more reason to respect honest people who handle money for a living.

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