CHARLOTTE, N.C. — Democrats are blasting Republican mayoral candidate Scott Stone over a charity he founded for military families that records show has spent more money on fundraising than on helping veterans.
Stone acknowledges the disparity, but he - and some nonprofit experts - said that's not unusual for relatively new charities.
Stone, who's running against incumbent Democrat Anthony Foxx, founded the North Carolina Heroes Fund in 2007 to make grants to veterans in financial straits.
The fund raised $129,697 from 2007 to 2009, according to its three most recent IRS tax filings. It gave out just under $40,000 in grants to military families, according to the tax forms. Those grants were about 30 percent of what the fund collected in donations.
More recent figures show the group handed out about 53 percent of what it took in. Experts say a benchmark for charities is 65 percent.
WSOC-TV first reported about the charity's expenses Thursday.
"The issues surrounding Scott Stone's charity raise some troubling questions about his ability to be a good steward of taxpayer dollars," Walton Robinson, the state Democratic Party spokesman, said in a statement. "When (most) of the money...goes to expenses other than the stated purpose of helping military families, there is something seriously wrong."
Foxx campaign spokesman Michael Halle declined comment Friday.
Stone, who has repeatedly asked Foxx for more debates, said the mayor's campaign was behind the story about the Heroes Fund. "Clearly this was a story planted by the Foxx campaign," he said, "because they don't want to talk about the real issues."
Stone said Friday the Foxx campaign had recently done a "push poll" on the issue, telephoning voters to ask them their opinion about the charity. Halle denied that.
Stone said his organization has had to spend money to raise money.
"The challenge has been as we've tried to grow the organization right in the middle of the recession," he said. "And as the recession has dragged on, it's been harder and harder to raise money. At the end of the day, we would like to give more to our military families. We're striving to give as much as we can.'
Stone said neither he nor anyone else in the organization takes a salary. "We don't have any frills of any kind," he said.
Charity efficiency goals
In 2009, the Heroes Fund had two large expenses including $41,542 to a Raleigh-based fundraising consultant Kohn and Associates. It also had $25,545 in other expenses. The tax form doesn't detail those expenses.
Stone released figures from his 2010 tax report, which hasn't been made public. The figures show revenues for the fund of $66,800 and grants totaling $35,700. That means 53 percent of the money went to help families.
According to New Jersey-based Charity Navigator, the most efficient charities spend at least 75 percent their budget on programs and services and less than 25 percent on fundraising and administrative fees.
"You can't really compare our charity to others because we're new," said Stone.
He said fundraisers have included events such as black-tie galas, which cost money to put on. "You can't give away money if nobody even knows you exist," he said.
Startup costs are hurdle
Sandra Miniutti, vice president of marketing for Charity Navigator, said small and new charities may have trouble meeting the 75 percent goal because of startup costs. She said she looks for a steadily improving percentage.
So does Jane Kendall, president of the N.C. Center for Nonprofits.
"It's not unusual for administrative or fundraising costs to be much higher in the first four to five years," she said. "It takes money to raise money and it takes more in the beginning than later."
She said the Better Business Bureau standard is 65 percent of a group's money going to its intended recipients.
"Given the nature of (Stone's group) it seems reasonable to me that soon, like this year, they might be able to reach the 65 percent," she said. She added that almost all nonprofits have a hard time raising money in the recession.
The charity's 2008 tax return lists some of the state's most influential politicians on its eight-person advisory board, including Republican U.S. Sen. Richard Burr.