By New Times
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By Robrt L. Pela and Amy Silverman
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The now-defunct COMPAS (Combined Metropolitan Phoenix Arts and Sciences), another "pass-through" organization with a budget about the same size as Scratch & Sniff's, last year put 44 percent of what it raised back into the community. Its executive director made about $60,000 a year (compared with Susan Heywood's $75,000).
Free Arts of Arizona, a group that promotes art therapy for abused children, put 77 percent of what it raised back into programming last year. The group's executive director earns $64,000 a year.
The American Institute of Philanthropy says fund raising and administrative costs shouldn't exceed 40 percent. Daniel Borochoff, president of the Chicago-based organization, says he hasn't looked over Scratch & Sniff's financial statements, but he spoke with New Times about some of the concerns raised by former board members.
He notes that while it's not illegal for family members to hold the majority of positions on the executive committee of a board of directors, it does create the potential for abuse.
"If you've got family members over breakfast making all the decisions for an organization, that would not instill a lot of trust," he says. "It makes them ripe for abuse, so what could very well happen is that they might be able to make a decision that would lead to something illegal."
And what about Susan serving as both chairman of the board and executive director? "You do see that sometimes. There can be risks with having that setup," Borochoff says. "It's as if one person is getting to make all the decisions."
Borochoff points out that fund-raising tools can often be disguised as educational materials. That appears to be true in the case of Scratch & Sniff. The Heywoods have produced a high-quality video about Scratch & Sniff they say they show to potential donors. The video features short takes on each of the groups Scratch & Sniff gives money to, emphasizing throughout that the groups' work wouldn't be possible without the assistance of Scratch & Sniff and the funds it raises. The video also includes a long segment on the annual black-tie dinner and awards presentations, showing local celebrities having a great time at the swanky affair.
The Heywoods, who gave New Times a copy of the video, are very proud of the tape. Bill Heywood explains up front that this is the video they use for fund raising. But Susan later states it's an education tool.
Scratch & Sniff also has produced a large-format, glossy newsletter that includes some phone numbers and other information for people who have found lost animals or want to spay/neuter a pet. But an entire page is devoted to photos of Scratch & Sniff donors' pets, and additional pages to the awards dinner. There's even an envelope stapled inside, for easy giving.
The last component of the Scratch & Sniff media campaign is a brochure touting the benefits of www.pets911.com, a for-profit group that lists lost pets on its Web site.
Borochoff also did not approve of Scratch & Sniff's purchase of seats at other charity events.
"I wouldn't be thrilled if I gave $100 to protect animals and then I find out the money's being used to fight Parkinson's and colitis," he says.
"You see this stuff going on because [nonprofit directors] want to hobnob."
Christine Gustafson left the Scratch & Sniff board in June, but her quarrels with Susan Heywood continue.
Earlier this month, Heywood wrote to Bob Magel, Gustafson's boss at Morgan Stanley, to report that Gustafson's behavior as a former board member was "extremely unprofessional, inappropriate, and potentially damaging to our organization."
Magel declined comment.
The letter continues: "Chris benefited from our [board of directors] with a couple of clients as well as our own small organization's account. We are deeply troubled that an individual who gained so much from her Board associations with us would then seek to destroy the very organization that provided access to these accounts."
Gustafson has hired a lawyer.
Even with all the headaches, Christine Gustafson isn't sorry she stepped forward.
"When donors give you their money, they're instinctively trusting that this is going to help animals and end euthanasia. And that is not what's happening. And it's hard enough in this era to raise money for charities."
Her only regret?
"I probably should have started asking questions sooner."