Last tax season, World Help reported over $227 million to the IRS in donated medical goods during 2011—which was apparently a huge overstatement. Yesterday the nonprofit announced that its actual donated goods only amount to $104 million, less than half of their previous report. They are in the process of filing an amended tax return, after self-reporting the mistake.
“It’s the right thing to do,” CEO and president Vernon Brewer said in an interview with Forbes.World Help was also on the roster for the Forbes largest charities in the U.S., a list it turns out they didn’t actually makes. “I feel so bad you put us on your list,” Brewer told the magazine.
The mistake apparently occurred during a transfer of goods from Direct Relief International. Upon shipping the donated goods to World Help, the value was listed at $3.3 million. But upon receipt of the said goods, the value was marked up by 3,100% to $106 million.
“The values had been whited out and new numbers put in,” Brewer said. “We got fraudulent documents. A couple of zeros were added.” The consultant identified was CMF Unlimited Inc., and owner Clifford M. Feldman has not returned any phone calls seeking comment or explanation.
Direct Relief isn’t happy, either, since it was their donation that apparently went awry—and their name on the fraudulent paperwork. “There was clearly a mistake that was made on their part,” he said.
Overstatement of donations is not a new topic of concern in the nonprofit sector. State and federal regulators are currently looking into whether charities exaggerate their donation incomes to make themselves more visible to donors. Reported values of gifts in kind (GIK) for things like deworming pills have been marked up as much as 81,000% in the past.