Every year, an independent watchdog organization called Charity Navigator compiles a list of what it considers the worst children's charities in America. Outrageous fundraising costs, whopping CEO salaries, "sound-alike" names and low program spending are cited as some of the reasons charities make the list.
Three weeks ago, a Factor senior producer found out about this year's list and pitched the story to O'Reilly. Bill said to narrow it down to the "worst of the worst," which is just what we did. The people at Charity Navigator told us that of the seventeen charities on their list, the Youth Development Fund (YDF) in Knoxville, Tennessee was the most egregious.
Working the story
The Factor went to work checking the charity's financial statements, browsing their website and researching their president, Rick Bowen. Latest available records showed YDF raised over $4 million dollars in 2003, but that an astounding 91% of the money went to fundraising and administrative expenses instead of the kids. Moreover, YDF's federal tax filing (990) showed that Bowen paid himself $426,412 in 2004.
Not surprisingly, a further search uncovered that Bowen had been sued by the state of Minnesota, probed by the state of Tennessee, graded an "F" by the American Institute of Philanthropy, and investigated by several journalists for the same kind of alleged financial shenanigans in the past. Bowen was even on the record to a local TV station admitting that he'd written off his car, which happened to be a 2002 Cadillac Escalade SUV, as a business expense.
On the go
At our story pitch meeting, The Factor senior producer updated O'Reilly on YDF. Bill turned to me and asked, "Are you ready to go to Knoxville this weekend, Watters?" I told him that I had hotel reservations and tickets to a ball game in Philadelphia on Saturday night. "Ok, so just fly from Philly to Knoxville on Sunday, see this Bowen guy, and fly back to New York on Monday. Knoxville's a nice little town. You'll like it. But when you talk to this guy, he might argue with you, so have a few things ready to come back at him with."
After the pitch meeting, I started prepping for the trip. I found out that Bowen's home address and business address were one and the same. And I already knew what he looked like from his picture in the paper, and that he drove that Cadillac Escalade, so I was pretty confident I'd find him. After I booked a crew, my car, my flights and my hotel, I was ready to go.
Sunday post-game, my flight landed in Knoxville at 4pm and I met the crew at my hotel an hour later. We gathered our gear together and drove to Bowen's condo. Immediately I knew he was home because his shiny white Cadillac was parked outside. I backed our car into a parking space directly across from his condo so I could spot him as soon as he opened his front door, which is what he did 2 hours later.
Bowen stepped outside in a white t-shirt and sweats, and the crew and I popped out of the car across the street. We were both walking towards each other as he headed to his SUV. "Rick Bowen!... Jesse Watters from Fox News! I just wanted to get your reaction to your charity being named the worst children's charity in the country!"
"I never heard of that before," said Bowen in a low sluggish voice. He appeared as if he'd just woken up. After I explained that a watchdog group had singled out his charity, he replied nonchalantly, "Well, they're entitled to their opinion."
I asked him how he justified paying himself over $400,000 when only 9 cents on every dollar raised actually went to help children. Bowen disputed that salary figure, claiming he made $150,000.
I moved to the next issue. "You said you donated money to Big Brothers/Big Sisters, but they say they never got any money from you." Bowen had once told a reporter he donated to a local Big Brothers/Big Sisters group, but the group said they'd never heard of him and asked Bowen to take their names off of YDF's website. Bowen told me he'd donated "Christmas presents."
He began getting into yet another Cadillac parked next to the Escalade.
I then asked him about how he'd claimed to have hosted a fundraiser with Boomer Esiason-an event that Boomer later told reporters he never attended. Bowen told me to "look it up in the Knoxville News Sentinel" and "see all the press about it." (The Factor later tried to find a story, but there was nothing.)
Bowen started the ignition and I asked if he "thought it was right" that he was taking in so much money in fundraising and administrative costs, but that the "kids weren't getting anything."
"The kids are getting quite a bit. Look up the tax returns," he said, and slammed the car door. "We have," I replied as Bowen took off.
Getting ready for the show
Back in New York we booked Trent Stamp, president of the watchdog group Charity Navigator, as the guest for a segment on Wednesday and we went over YDF's tax filing together. We found that YDF's activity was even worse than I had originally thought.
YDF raised $3,162,863 in 2004, but paid $2,644,913 to professional telemarketers and gave just $82,803 to children. That's only 2.6 cents of every dollar raised. Also, Bowen's salary was indeed $426,412. That's more than the CEO of the nationwide YMCA, an organization that raised over $73 million last year.
I compiled the statistics in a packet for Bill, along with background on the story and information on Rick Bowen's previous run-ins with state officials. I cut the sound-bite of Bowen, and brought Charity Navigator president Trent Stamp into the green room.
Stamp led off the segment telling Bill that Bowen was obviously not telling the truth about his salary, and that only $82,000 out of $3.1 million was spent on children. "Is this illegal?" asked Bill.
Stamp replied, "It's a legal scam... unfortunately, it's a strange world when these fraudsters are more afraid of Bill O'Reilly than of the IRS."
The gigantic fees charities paid telemarketers became the focus, and O'Reilly said their telemarketer, Advanced Community Services, was just as disgraceful as YDF for charging so much. Bill wondered aloud if there were any "kickback schemes" going on.
Stamp said there must be, and suggested that because these businesses operate in the shadows, it's a ripe environment for hucksters. He recommended that no one donate to charity over the phone and hailed states such as Pennsylvania, New York and California, which have strict non-profit enforcement mechanisms.
Bill thanked Stamp for the work Charity Navigator is doing, and told his viewers to "shun" Rick Bowen and Advanced Community Services for "taking money from the kids."
The Factor will continue its reporting.
Jesse Watters has been a producer for The OReilly Factor since 2003. Before joining Fox News, Watters worked on political campaigns and in finance. He received a B.A. in History from Trinity College (Hartford, CT) in 2001. Watters was born and raised in Philadelphia and moved to New York in 1995.