As Halloween creeps up tomorrow, we’re reminded that not all the ghouls and goblins lurk in haunted houses—some hide behind nonprofit status. These organizations “trick” donors with good intentions while failing to “treat” the communities they claim to serve.
In earlier posts, we’ve shared ways to protect yourself from these fundraising frights—like understanding the differences between cash vs. in-kind donations, and tips on how to donate safely. Today, we’re pulling back the cobwebs on a few chilling tales of charitable organizations gone wrong. Before you give, arm yourself with protection spells (a.k.a. due diligence):
- Know the organization personally, either interact with their Board members, employees or beneficiaries (people impacted by their mission)
- Get a brochure but review the 990 tax filings and even better, the audited financial statements if available
- The IRS recommends to know what contributions / donations are tax deductible and check their IRS Tax Exempt Organization Search tool
- The Federal Trade Commission (FTC) recommends to review the charity’s rating and other information on sites like the BBB Wise Giving Alliance, Charity Navigator, CharityWatch, and GuideStar
Now, dim the lights and enter… the haunted hall of ghostly donations:
Story 1: Ghost Cars: $45 Million in Donations That Never Came Back to Life
Between 2017 and 2022, Kars-R-Us.com, Inc. raised over $45.5 million for the United Breast Cancer Foundation through vehicle donations. But in a ghoulish twist, only 0.28%—about $126,815—ever reached breast cancer screenings. The rest was devoured by Kars, its operators, and vendors. Under a settlement, Kars’ president has been permanently banned from fundraising. Donors thought their cars would bring hope back to life, but instead, those gifts turned into ghostly shells.
Link FTC – Sept 2025 – Recent Settlement – Professional fundraisers: Don’t skimp on your due diligence — or the truth
Story 2: Phantom Finances: How a Philadelphia Nonprofit Vanished $5 Million into the Shadows
In Philadelphia, the Community Council became a financial haunted house, allegedly misusing $5 million through self-dealing contracts and lavish indulgences—art, golf, entertainment, and luxury travel. Leaders even sold off a publicly donated tennis facility for $1.5 million, shrouded in secrecy. Despite audits and red flags, accountability was buried six feet under. A once-trusted institution drifted into a phantom maze where donor intent disappeared into the dark.
Link The Philadelphia Inquirer – Jan 2024 – Philly nonprofit execs spent millions on golf, art, Sixers tickets, and sketchy contracts.
Story 3: Haunted Relief: How $51 Million in COVID Funds Became a Ghostly Bribery Scheme
In February 2025, federal prosecutors unsealed an indictment against Julio Medina, founder and CEO of Exodus Transitional Community in New York City, alleging a sprawling bribery and fraud scheme. Medina is accused of accepting $2.5 million in bribes to steer roughly $51 million in COVID relief funds—meant for inmate housing and reentry programs—toward companies tied to his associates. Many of the contracts, for “security” or “catering,” were allegedly bogus, while Medina benefited personally through luxury perks like homes, car payments, and cash. A nonprofit that once promised redemption is now a haunted shell, where relief funds drifted like ghosts into illicit corridors.
Link Justice department – Feb 2025 – Founder And CEO of Non-Profit and Two Others Charged With Fraud, Bribery and Money Laundering Offenses
🧛 Final Warning: If you’re planning to do good this season, beware of spooky organizations. Don’t let your generosity be lured into the shadows—because sometimes the scariest monsters wear nonprofit masks.
