Understanding Charity Mismanagement and Fraud

What is a major factor contributing to the systemic issue of charity mismanagement?

• Strict government regulations

• Excessive donor scrutiny

• Donor naivety and weak regulations

• High transparency in financial reporting

Which of the following is NOT a main revenue source for charities?

• Tax-exempt status

• Private donations

• Stock market investments

• Corporate and government grants

How do some charities create an illusion of effectiveness?

• By reducing administrative costs

• By manipulating expense reports

• By providing detailed financial reports

• By increasing direct aid spending

What is a common justification for high executive salaries in charities?

• To comply with government regulations

• To increase direct aid spending

• To reduce administrative costs

• To attract top talent

Which of the following is a common misuse of donor money by some charities?

• Increasing transparency

• Reducing marketing expenses

• Spending on lavish benefits

• Investing in local communities

What was a major issue with the Wounded Warrior Project?

• Spending less than 60% of donations on aid

• Operating without a tax-exempt status

• Providing excessive aid to veterans

• Avoiding corporate sponsorships

What was the outcome of the Cancer Fund of America scandal?

• It expanded its operations internationally

• It received additional government grants

• It was shut down by the FTC

• It was praised for its transparency

What was a significant issue with the Red Cross Haiti earthquake relief efforts?

• Building too many houses

• Excessive donor scrutiny

• Spending most funds on direct aid

• Severe financial mismanagement

What is a major barrier to addressing charity fraud?

• High donor awareness

• Lack of transparency and social pressure

• Excessive government oversight

• Strict financial reporting requirements

What is a recommended action for donors to prevent exploitation?

• Use watchdog sites for research

• Support only large organizations

• Donate impulsively

• Avoid researching charities