News and analysis
November 29, 2012

Charity Lowers Revenue Figure by $135-Million

A Christian relief organization whose astronomical growth in the past two years landed it at No. 77 on the Philanthropy 400 list this year is lowering its 2011 revenues by $135-million after finding “inconsistencies” in its noncash donations.

World Help, in Forest, Va., originally reported on its 2011 tax forms that it received $239-million in revenue in 2011, 95 percent from noncash donations.

Its revised total: $104.1-million—$12.2-million in cash and $92-million in noncash donations.

The change follows a Chronicle examination of World Help’s tax forms, which identified roughly $350-million in gifts over three years from groups that said they had never made those donations. Such noncash donations have been coming under intensifying scrutiny by charity regulators concerned that overvaluing and improperly counting such gifts—intentionally or not—can inflate a charity’s effectiveness to donors.

After The Chronicle asked him questions about the gifts this month, Vernon Brewer, the group’s president, responded by saying he had ended a contract with a consultant whose work to obtain medicine and other supplies he had initially credited for the charity’s 940-percent jump in revenue since 2008.

Organizations Deny Making Gifts

Two large nonprofits—Catholic Medical Mission Board and Cross International—told The Chronicle they did not make gifts to World Help in the years the Virginia charity reported they did.

A third organization, Direct Relief International, told The Chronicle that it gave $3.3-million worth of noncash donations in 2011 to World Help. World Help’s tax forms, meanwhile, state that it received $100-million from Direct Relief last year.

The Chronicle is the one that brought this to our attention that there was a discrepancy,” Mr. Brewer said in an interview. “There were documents that were highly inflated than from what Direct Relief had. As soon as you brought it to our attention, we corrected it.”

Mr. Brewer said in an e-mail earlier this week to The Chronicle that his group, which he runs with his daughter, would also be revising figures from 2009 and 2010.

“We were pleased to find ourselves on your 2012 list of the top 400 charities. However, we have recently become aware of some inconsistencies in our paperwork and documentation related to our gifts-in-kind,” Mr. Brewer wrote. “As soon as this was brought to our attention, we took the necessary steps to amend both our 2011 financials and IRS Form 990.”

According to Mr. Brewer’s new revenue total of $104.1-million, World Help would be No. 204 on the Philanthropy 400.

No More Third-Party Deals

Mr. Brewer and his consultant, Clifford Feldman, said in previous interviews that World Help had been counting as donations gifts to other groups that World Help played a role in delivering to countries such as Guatemala.

Mr. Brewer said World Help would stop such three-party transactions, which Mr. Feldman helped facilitate. With that process eliminated, Mr. Brewer said his group no longer needed Mr. Feldman’s services.

Mr. Feldman, president of CMF Unlimited of Parkland, Fla., could not be reached for comment this week.