State to Review Report on MADD’s Spending

A state inquiry will look into Better Business Bureau reports that Mothers Against Drunk Driving spends more on administrative costs than on programs to fight drunk driving, a state official said Wednesday.

“We will look for expenditures that are excessive, such as high salaries,” said Carole Kornblum, a senior assistant attorney general. “The state could then sue to recover the money and return it to the charity.”

MADD officials say some of the costs they consider educational expenses--such as mailings--were counted as fund-raising costs by the bureau.

A Better Business Bureau national report issued in September said MADD, founded in California in 1980 but now headquartered in Texas, fails to meet bureau standards for handling financial contributions.

The report was prompted by inquiries from potential MADD financial donors asking for information about the fast-growing organization, which has 300 chapters nationwide.

MADD submitted financial statements to the bureau’s Philanthropic Advisory Service, which sent the report to the bureau’s 167 offices. A copy was also filed with the state attorney general’s office.

MADD does not spend “a reasonable percentage of public contributions on the programs and activities described in solicitations, in accordance with donor expectations,” the report said.

The combined income for the anti-drunk driving group was $2.7 million for the year that ended June 30, 1983, according to the financial statements submitted by MADD.

Of the $2.7 million, 49% was spent on fund raising and management and 41% for program services, according to the report.

“Our inquiry will be a routine audit,” Kornblum said. The inquiry will start when MADD submits its periodic financial statement, due Jan. 16.

“The Bureau has very strict standards and there may just be a difference in accounting methods,” Kornblum said.

MADD noted in a response published with the bureau report that the bureau regarded the cost of mailing MADD literature as a fund-raising expense.

However, MADD claimed that its direct-mail program, a major source of contributions, “was primarily for the purpose of bringing drunk-driving issues before the general public.”

“What may be at the bottom is simply a difference as to what constitutes overhead,” Kornblum said.

“MADD has made great strides in making the public aware of the dangers of drunken driving. To one person that might come under administrative costs, but to another it might be considered part of a program.”

“This just shows what happens when grass-roots organizations like MADD are undermined by the reporting standards of organizations such as the Better Business Bureau,” MADD President Candy Lightner said in a telephone interview from the group’s Hurst, Tex., headquarters.

Lightner said the most effective way to raise money in a nonprofit group’s early days is through direct mail. “We consider direct mail as both fund-raising and educational but the bureau looks on it as just fund-raising,” she said.

Lightner founded MADD in the Sacramento area when her daughter was killed by a drunk driver. She moved the group to Texas in 1983.