Do Starving Children Really Get Bulk of Donors’ Money?

Where is the money going?

L. Joe Bass, the controversial leader of the embattled International Christian Aid organization, which has been raising more than $30 million annually, says that most of it--60% or better--is going to relief and other humanitarian operations overseas.

But critics--among them the Council of Better Business Bureaus and former employees who say they were in a position to judge--contend that figure is no more than 41%, perhaps lower.

Statements filed by ICA with the Internal Revenue Service in 1983 indicate that less than 30% of the money that ICA collected in the United States that year was transferred overseas for cash grants, food, medical aid and other humanitarian services provided by ICA in Portugal, Africa, Central America and the Far East.

ICA solicits funds through a variety of television commercials, printed advertisements and direct-mail appeals. Critics complain that these ads frequently are misleading, but Bass denies it.

Former ICA employees said in interviews that the dramatic photos and films of starving children and glowing accounts of how ICA is meeting the famine crisis are often used repeatedly and sometimes do not show the people or places they purport to show.

“Even if things were better, they were always showing the old film . . . in order to produce more money,” said James Nyhoff, a former ICA employee in Uganda.

“The more emotionally you could describe it, the more money you could raise,” he said. “They were always asking, ‘Where is there a really desolate village and skinny people?’ ”

Bass, during a long interview in which he responded to a host of complaints by ICA critics, defended the filming and the appeal letters. He conceded that “there is sometimes a script and a general outline” for shooting the films, adding that although they are shot at the locations they are intended to depict, they might be generic rather than specific and thus usable in multiple ways later.

“But they are accurate,” he said. “Any pictures identified with a country are definitely from that country.”

In any case, no one disputes the appeals’ effectiveness.

“When you see these poor, precious children on television with flies all over them--these starving children--you have to respond,” said Virginia Christianson of Westlake Village, one of thousands of “sponsors” who have been mailing in $20 a month to provide food and other necessities for a child.

The Council of Better Business Bureaus, in an analysis of financial statements submitted by ICA, figured that 41% of contributions to ICA were spent on programs described in its solicitations, well below the council’s minimum acceptable standard of 65%.

Peter Horne, who served for two years as ICA’s executive director of operations in North America, estimated that no more than 20% of what ICA takes in--”and probably much less”--is spent on relief for starving people and on other humanitarian efforts. Horne is among former employees subpoenaed to testify before a federal grand jury investigating ICA.

Evelyn Hughes, who worked for about 18 months as an executive secretary in Bass’ office, placed the figure even lower, saying she “wouldn’t be surprised if it’s as low as 5%.”

Bass’ spokesmen cite federal tax records to defend ICA expenditures, the same records that some critics use to attack those expenditures. These Internal Revenue Service 990 forms for 1983--the latest made available by Bass--have been filled out under the name InterAid Inc., the fund-raising arm of the complex organization that more often does business simply as International Christian Aid.

The 990 forms list donations from the American public totaling about $11.23 million, about a third of the money ICA says it collected worldwide that year.

Nello Panelli, a spokesman for ICA, pointed out that the same forms indicate that the organization spent $6.8 million--or about 61% of the $11.2 million--on “program services.” Panelli said program services represent the aid dispensed by the organization in 1983. Of the other $4.85 million, the forms list roughly $900,000 for management and general expenses, $1.15 million in fund balances and $2.8 million for fund raising.

But a further examination of the forms shows that of the $6.8 million listed for program services, only $3.3 million--slightly less than 30% of the money raised--is entered as having been transferred overseas for relief aid.

Of the remaining $3.5 million entered as program services, the forms itemize expenditures for a wide variety of goods and services, with by far the largest amount--$2.38 million--listed under “promotional.”

Panelli said that ICA’s promotional expenditures include material to “inform and educate the public as to the plight of Christians in Communist countries and the plight of disabled people in order to mobilize a fight against persecution and hunger.”

Panelli sees a distinction between that and fund raising. “There’s a difference between telling people about a problem and asking for money to help solve it,” he said.

(The IRS statements are among the few public records available on ICA’s internal finances. As a religious organization, ICA is exempt from state reporting requirements applied to other nonprofit fund-raising groups. Despite Bass’ repeated assurances that ICA’s private books are open for inspection, he has refused requests by The Times for access to ICA’s offices or financial records. He has provided summarized balance sheets similar to those turned over to the Council of Better Business Bureaus.)

$20 Monthly Donations

Bass said that of the $20 a month from each donor who supports a needy child under ICA’s sponsorship program, $15 is sent overseas.

Of the $15, $5 to $7 is subtracted for administration, transportation, salary and medical and dental clinic expenses, leaving $8 to $10 for the goods and food that reach each needy child, according to spokesmen at Apoio Cristao Internacional, a large ICA operation near Lisbon, Portugal.

Although some donors have expressed surprise that no more than half of their $20 goes to directly feed and clothe each “adopted” child, that breakdown is not considered an excessive ratio of indirect costs to consumable goods at the field level, according to relief experts.

Henny Barelds, the recently hired director of Apoio Cristao Internacional, prides himself on what he described as an operation that is “both honest and efficient.”

Apoio’s handsome buildings--freshly painted and well scrubbed--are grouped in a loose quadrangle at the center of a lush, green field. It is about five miles south of downtown Lisbon, well away from the fetid slums that the Portuguese call barracas , where many of the people served by Apoio--mostly refugees from Angola and Mozambique--live.

The operation, expanded from a relief organization begun by a local evangelist, Jose da Conceicao Almeida, provides food and other services for what Apoio says are 18,000 needy children and their families.

Ready Accounting

Barelds promptly produced account books and computer files describing where every cent from ICA is spent. Comparison shopping at a local supermarket indicated that the food Apoio buys for hungry children is purchased at less than retail cost.

Apoio has its critics, however, men like Horne and Jaime Torre Vieira, president of the rival Evangelical Alliance of Portugal, who complain that Apoio is inappropriately luxurious.

Compared to the facility run by Vieira--a cramped office in a downtown Lisbon office building--the five-acre Apoio complex, which includes dormitories for abused children, an attractive kitchen and dining hall, a modern warehouse and spacious office facilities for clerical work and a medical clinic, does seem grand. Compared to the facility now run by Almeida--a tiny, jumbled storeroom on the edge of one of the barracas , the complex seems positively sumptuous.

But compared to a similar facility in Portugal run by the Roman Catholic Church--and similar facilities here in the United States--the Apoio complex seems merely efficient and clean, adequately furnished and equipped.

Complaints that ICA has raised money through appeals for aid to starving refugees in Ethiopia but failed to deliver as advertised have prompted a broadening investigation by a federal grand jury and by local, state and federal agencies.

No Ethiopia ‘Team’

Last fall, ICA advertisements seeking donations for “Ethiopia and other drought-stricken areas of Africa” described ICA’s “own teams . . . on the spot, ready to distribute the airlifted emergency food to these people.” Actually, ICA never has had personnel stationed in Ethiopia, although it has missions elsewhere in Africa.

Bass asserted that he has never forsaken his “first love”--the impoverished people of the Third World, especially in Africa, where his ministry began more than 30 years ago.

His relief and aid programs, he said, have “brought substantial material and practical aid to people in need.”

Also contributing to this story was Times staff writer Charles Powers in Nairobi.