Ohio Dems Try to Revive Debunked Smear Against Hannity-backed Charity

August 10th, 2010 4:46 PM
The Democratic Party of Ohio has recycled a thoroughly debunked smear against Fox News host Sean Hannity and Freedom Alliance, a charity he works with regularly that raises money to educate the children of American servicemen. A release from the Ohio Dems claimed that Rep. John Kasich, Republican candidate for governor, "promote[d] Hannity's scandal-ridden 'Freedom Alliance' concerts that are under investigation for misappropriating charitable donations."

The Ohio Dems cited a complaint by the technically non-partisan, but ideologically liberal group Citizens for Responsibility and Ethics in Washington. CREW claimed that the charity, Freedom Alliance, had "awarded $2,147,750 in scholarships," only half of what they spent on salaries, and a quarter of what they spent on shipping expenses, according to their complaint to the Federal Trade Commission.

But this line of attack on Freedom Alliance is bogus. CREW fails to note that since most servicemen are relatively young, most of money Freedom Alliance raises is put in a trust fund until soldiers' children are old enough to take advantage of it. Hence, while the charity raised roughly $2.1 million for scholarships in 2008 alone, according to its 990 form (pdf), it only spent about $800,000 that year, putting the rest into the trust.

CREW's claim that the charity only spent $2.1 million on scholarships over five years is disingenuous. While the number is technically correct, the scholarship fund contained $15,919,391 as of 2008, according to the 990 linked above, all slated to be spent on educating the children of servicemen when they reach the appropriate age.

Jon Soltz, chairman of the left-wing advocacy group VoteVets.org, which according to Politico "is backing CREW," claimed "80 to 90 percent" of funds raised should benefit veterans and their families. But there is no indicator that Soltz was referring to any funds other than the money spent directly on scholarships the year they were raised. As noted above, that number does not tell the full story.

Also noted in the Democratic release is Freedom Alliance's "F" rating from the American Institute of Philanthropy. But the release does not delve into AIP's criteria for that grade.

According to the organization's website, top-rated charities "generally spend 75% or more of their budgets on programs, spend $25 or less to raise $100 in public support, do not hold excessive assets in reserve, and receive 'open-book' status for disclosure of basic financial information and documents to AIP."

Accorfing to its 990 form for 2007 (the year it got that rating, according to the release - pdf), Freedom Alliance spent $1,011,501 on fundraising, and raised $10,762,256 in public support. That means it spent less than $10 on fundraising for each $100 it raised, well below the $25 threshold set by AIP. Of Freedom Alliance's $7,461,350 budget that year, $6,084,474, or roughly 81.5 percent, was spent on programs.

The remaining two criteria - a charity's open-book status and the size of its reserves - are the only factors that could have earned it the "F" rating. But as discussed above, Freedom Alliance keeps massive reserves (compared to the amount it pays out annually) so that it can afford to pay for scholarships when the young children of currently twenty-something servicemen come of age (the average soldier is in his mid-twenties).

So either the nature of the Freedom Alliance charity earned it the "F" rating - a completely benevolent reason - or AIP does not enjoy "open-book" status with it (or both). In any case, it hardly seems that Freedom Alliance is deserving of the "scandal-ridden" label given it in the Ohio Democrats' release.

In all, the release contains nothing more than baseless accusations against Hannity and Freedom Alliance. The Democratic Party is apparently trying to revive it in an effort to damage a political opponent. It's a shame that Hannity and Freedom Alliance are caught in the middle of this political game.