Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 21, 1994 TAG: 9406220136
SECTION: VIRGINIA PAGE: B4 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
Now the Richmond-based charity, one of the world's leading children's relief groups, is struggling with a rare battering of bad publicity that its chairman says has mystified the nonprofit organization's governing board.
``It's something we find almost unbelievable, that someone would come into a group to assist children and systematically engage in an activity like this,'' said Graham B. Spanier, chancellor of the University of Nebraska and a 10-year member of the fund's board of directors.
He was referring to ousted board member Thomas H. Naylor, who charged that the charity was spending too much on administrative costs and not enough helping children.
The Christian Children's Fund provides a variety of services - from food and clothing to housing and medical care - to up to a half-million children in 40 countries. Last year, it had revenues of $112 million.
The fund is perhaps best known in the United States for a long-running series of magazine and TV ads showing the sad, vacant stares of neglected children in undeveloped countries.
Three months ago, the fund's 20-member board took what Spanier acknowledged was an ``unprecedented'' action by removing Naylor from the board.
Naylor, a former economics professor at Duke University who now lives in Middlebury, Vt., said he started raising questions about the organization's finances last summer that challenged the impression given to sponsors that 80 cents of every dollar goes to needy children.
``The reality is, the amount that goes to children is probably no more than 50 cents, at the upper limit,'' said Naylor, who was a member of the board's audit committee.
``He is grossly misinformed,'' said Spanier, CCF's chairman for the past two years. ``We absolutely send a minimum of 80 cents of every dollar contributed to the organization to the program country. It is a number we review at every board meeting.''
Spanier said programs in the 40 countries where the fund operates cover a wide range of needs and serve anywhere from a dozen youngsters to hundreds. Among the projects are day-care centers, health clinics, schools and orphanages.
``We don't take money and put it in the pockets of children,'' Spanier said. ``But it all goes to the benefit of the children.''
He said administrative costs in the countries are covered by the 80 cents, but the national organization's administrative costs are paid from 10 cents of the remaining 20-cents-on-the-dollar in contributions. The other 10 cents is spent on fund raising.
``People might say you should only count the food or the clothing'' in the amount spent on the children, Spanier said, ``but the salary of a nurse, for example, would be included in the 80 cents, or the salary of a teacher. I've never met anybody in the business of charities who would find any fault with that.''
``When you direct millions of dollars, you're going to find instances where funds are not used the way you intended,'' he said. ``But we have an excellent system to detect that. Tom never understood that. If something wasn't right, he assumed the organization was rotten to the core.''
Naylor said the board let the fund's managers run the organization with little oversight and only ``pretended to know what was going on.'' He said he tried to get answers directly from the agency's auditors but was ordered to submit questions to the chairman of the audit committee, Robert K. Feaster.
He did so, he said, but ``essentially none of them were ever answered.''
Feaster agreed that Naylor was told to refer his questions to the committee rather than directly to the auditors.
``You wouldn't release audit information to any individual,'' he said. However, he said, Naylor never followed up with any questions to the panel.
Naylor said some of his concerns about the agency were shared by other board members, including Bishop Walter F. Sullivan of the Catholic Diocese of Richmond and Robert Hintz, a retired corporate executive who also lives in Richmond. Neither Sullivan nor Hintz returned phone calls.
by CNB