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5 Charities You Want to Avoid

Operation Lookout also gets an "F" from CharityWatch.org, while this month South Carolina's secretary of state included it on an annual list of charity "Scrooges."

Operation Lookout co-founder Melody Gibson says her group ran its own telemarketing unit for three years rather than pay third-party firms, but found it didn't save any money.

"While it increased cash flow, it did not reduce expenses and it didn't increase our productivity," she says. "It is misleading by watchdogs not to view this perspective."

Operation Lookout sees 37% of what it pays telemarketers as an educational expense rather than pure fundraising, Gibson says. Telemarketers publicize Operation Lookout's website, ask consumers to display posters of lost kids and otherwise promote the group's activities.

Consumers who don't want telemarketers to get a large chunk of their donations can simply give money directly to Operation Lookout via a PayPal link on the group's website, she says.

Firefighters Charitable Foundation
Money going to professional fundraisers: 85.4%

This charity, run by former New York Yankees slugger Frank Tepedino, gets zero stars from CharityNavigator primarily because it spends more than 85% of donations on professional fundraising fees.

Just 7.7% goes to the group's stated mission of providing $500 to $1,000 and free hygiene kits to fire victims, as well as small grants to volunteer firefighting companies, fire-prevention educational efforts and the like.

CharityNavigator has given the Firefighters Charitable Foundation 11 zero-star ratings in the dozen times it's reviewed the group since 2002, while CharityWatch grades the nonprofit as an "F." Missouri Attorney General Chris Koster included the foundation on a list of "15 Worst Charities" that he issued in 2010.

Tepedino admits his group does use high-cost telemarketers for fundraising, but says the nonprofit has no other option.

"We can't hire people to do [in-house telemarketing], we have to hire professionals," he says. "We don't have the equipment, we don't have the rooms -- we work off of $10 to $15 donations and we don't get any grants or anything like that."

The ex-slugger adds that the foundation does other forms of fundraising in-house.

For instance, Tepedino said his group took in some $20,000 to $25,000 at a New York fundraising dinner recently, "and we'll give 100% of that, other than some administrative expenses" to those in need.

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