By John Romano
(YBH) – Perhaps you have seen the ads on the Huffington Post and many other websites imploring you to pony up $250 to cure a cleft palate in the third world? The ads are from a charity known as Smile Train. With credit card in hand I was about to contribute $250 on behalf of myself and YBH!
Instead, I looked into the background of The Smile Train, Inc. Not that I didn’t trust the smile makers of Madison Avenue (the charity has its headquarters office in the heart of Manhattan), but I wanted to learn a bit about charity ranking and resource websites. After a cursory search I came up with more than a few dependable charity ranking websites. Among them are, CharityNavigator.org, GiveWell.org and GuideStar.org. After my research, the $250 is still with me, and will go to a different charity*.
A few of the reviews of Smile Train by GuideStar.org users went like this:
My spouse & I have both donated to this organization so we ended up getting 2 solicitations regularly from them. I finally convinced them to send only 1 at a time. But later I told them that I could donate when I wanted to online, that no amount of wasted paper, postage, & time would make me give any more. Instead of DECREASING the number of times they mailed me stuff, they INCREASED it dramatically – sometimes 2 & 3 pieces of mail a week. Each time I e-mail the person who promised to take me off their mailing lists, but no one responds & it just keeps coming. I’ve told them I will NEVER donate again since they don’t abide by my wishes but it does no good.
Yeesh! An investigative article by CharityWatch.org backs up the above claim.
However, it was the following comment that inspired me to dig into Smile Train’s Form 990′s (IRS Form 990 is the tax return charities use in lieu of a personal 1040 or corporate tax return):
I used to donate to this <sic> orgainization, but the CEO salary went from below $200K to now $640K in just a few years. Percentage-wise it is not too much, but it just seems he is in it for the money for his salary to be that high out of donate money.
The poster, pho4723, that left this comment is correct.
Brian Mullaney the President and Founder of the charity Smile Train made over $800,000 running the charity for the fiscal year 2007 (Smile Train’s fiscal year runs from June-June, 2007 covers the period from 7/1/2007 through 6/30/2008.)
The following year (2008/2009) Mr. Mullaney’s salary was $640,000. The difference? $191,000 in compensation that Mr. Mullaney received from running the charity’s UK division is not listed on the firms 2008 Form 990. Most likely Mr. Mullaney’s salary was on par with 2007′s $800k figure, although it would be impossible to tell without access to Mr. Mullaney’s personal tax returns. Mr. Mullaney is still listed as the co-founder on Smile Train’s UK website.
The public face of Smile Train is a former nurse named DeLois Greenwood. Ms. Greenwood is Smile Train’s second-in-command. In 2001 Ms. Greenwood made $145,000 as vice president, while Mr. Mullaney made $146,000 as president. Things then began to change in Mr. Mullaney’s favor. To contrast, Ms. Greenwood’s 2007 salary of $210,000 pales in comparison to Mr. Mullaney’s $800k plus take that year. While Ms. Greenwood’s total compensation grew 45% between 2001 and 2007, Mr. Mullaney’s grew an astounding 557%.
What bothers me about Mr. Mullaney’s salary, besides the fact that Mr. Mullaney makes double what the President of the United States makes while running a tax exempt charity that only manages $120 million in assets, is a bit of anecdotal evidence I discovered when perusing the charity’s 990′s:
Notice the footnote to Mr. Mullaney’s salary. This footnote first appears in 2006 when Mr. Mullaney’s salary jumps from $250,000 to $577,000. The qualification does not change the charity’s tax filing in any way as Mr. Mullaney’s compensation is still included within Smile Train’s total compensation figures. It is unlikely that the IRS requires this footnote. It is more than likely put there for donors who are smart enough to look through a charity’s Form 990 before giving.
The takeaway from Smile Train’s tax returns is that Mr. Mullaney came to do good and, as the saying goes, did very well indeed.
According to Mr. Mullaney’s own bio, he “has a degree in business economics from Harvard University and worked in advertising for more than 25 years. He co-founded Schell/Mullaney advertising in 1990, a high-tech marketing agency which was sold in 1996 to CKS, America’s first publicly-held, interactive advertising agency.” There is no question that Mr. Mullaney has used his advertising background to raise the profile of the horrible plight of those born with a cleft palate. The question is: Should he have become personally wealthy in the process?
Another charity watch website, GiveWell.org stated:
We do not have the information we would need to be confident in the effectiveness of Smile Train’s programs, particularly regarding quality control of surgeries and education in the developing world. We also do not have a clear breakdown of how funding is spent by program (as over 30% of program expenses are spent on a program that we can’t identify a description for). We have contacted Smile Train for clarification, but have not spoken with them as of yet.
A little more transparency would help Smile Train’s cause. When looking over the financial information provided on Smile Train’s own website. The charity gives no direct link to their Form 990′s. Instead they encourage you to get them from GuideStar.org. That is odd for two reasons. First, GuideStar.org insists that users register in order to get a charity’s full financial information, a privacy-ending road block no charity needs when seeking donations. Second, almost all of the reviews from users on GuideStar.org of Smile Train are negative. Note: FoundationCenter.org provides pdf’s of current and historical 990′s for all public charity’s for free without signing up.
Smile Train is a huge charity, but should its leader make double what Barack Obama makes as President of the United States? Better yet, should Mr. Mullaney make more than Gail McGovern, the President and CEO of the American Red Cross? In 2008, Ms. McGovern made a little over $446,000. Her charity doled out $216,863,333 to the needy that year while managing assets of over $3.5 billion. That same year Smile Train spent $14,032,778 on program activities while managing $117 million in assets.
* ReSurge International is the winner.
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John Romano is the publisher and editor of Yes, But However!, a musician, a former political correspondent for BBC Radio London, and a serial web entrepreneur. Follow him on twitter: twitter.com/yesbuthowever or John Romano on Google+John Romano article archive.
