Human and Civil Rights : Advocacy and Education
Center For Consumer Freedom
Promoting personal responsibility and protecting consumer choice
1090 Vermont Avenue, NW Washington, DC 20005
tel: (202) 463-7112
Charity Navigator has become aware of the following information in connection with this charity:
During our analysis of this charity’s FY 2011 Form 990, the document revealed that the majority of the Center for Consumer Freedom's functional expenses were paid to its CEO Richard Berman's for-profit management company, Berman and Company. The document revealed that, out of total expenses of $2.12 million, $1.29 million were paid to Berman and Company for "staff[ing] and operat[ing] the day-to-day activities" of the charity. See relevant pages from the organization's 2011 Form 990 filing via PDF files 2011 Page 8, 2011 Page 10, 2011 Page 2, 2011 Schedule L and 2011 Schedule O for more information.
We find the practice of a charity contracting for management services with a business owned by that charity's CEO atypical as compared to how other charities operate and have therefore issued this Donor Advisory.
The Center for Consumer Freedom has requested that Charity Navigator also disclose that its arrangement with the management firm is reviewed and approved annually by its independent officers and directors in a process that complies with the organization's conflict of interests policy, and its financial statements are audited each year by an independent CPA. Accordingly, please see relevant pages from the organization's 2011 Form 990 filing PDF files 2011 Page 6 and 2011 Schedule O for the former, and 2011 Page 3 for the latter.
Affiliated nonprofits also have Donor Advisories including: American Beverage Institute, Enterprise Freedom Action Committee, Employment Policies Institute Foundation and the Center for Union Facts.
On August 12, 2013, TIME magazine reported that the Humane Society filed "an IRS complaint against the CCF [Center for Consumer Freedom] in 2012…" which "…alleged that Berman used nonprofit laws to further the interest of his corporate clients. It included evidence suggesting that most of the money in his charities went directly to his for-profit PR firm." The article noted that the complaint "…still has not resulted in any action against Berman or his company." For more information, please see the TIME magazine article.
During our analysis of this charity's FY 2012 and 2013 Forms 990, the documents revealed that the Center for Consumer Freedom continued to contract with CEO Richard Berman's management company, Berman and Company. Please see relevant pages from the organization's 2012 and 2013 Forms 990 for more detail: 2012 Page 8, 2012 Schedule L, 2013 Page 8, and 2013 Schedule L.
Charity Navigator, as an impartial evaluator of publicly reported financial information, takes no position on allegations made or issues raised by third parties, nor does Charity Navigator seek to confirm or verify the accuracy of allegations made or the merits of issues raised by third parties that may be referred to in the Donor Advisory. However, Charity Navigator has determined that the nature of this/these issue(s) warrants making this information available so that donors may determine for themselves whether such information is relevant to their decision whether to contribute to this organization. (See How we decide to post a Donor Advisory).