The American Institute of Philanthropy dba CharityWatch, is a nationally acclaimed charity rater and nonprofit watchdog organization founded in 1992 that recently downgraded Operation Underground Railroad to now just a “?” rating.
Citing the multiple criminal investigations, the fantastic investigative series by Anna Merlan and Tim Marchman of VICE News and articles/videos by Lynn Packer and I, CharityWatch not only downgraded O.U.R.’s rating to a question mark, but provides a damning analysis.
As I learned of this downgrade, I have been consulting a former FBI Special Agent (who asked not to be named) for an upcoming video/podcast (undecided on the format) on Operation Underground Railroad and the subject of human trafficking overall. He said the analysis is “a dire warning not only to anyone looking to donate to the organization, but to Tim Ballard and officers of O.U.R. Indictments are probably going to be handed down”
In our upcoming video, we explore what likely is going on behind the scenes, in the criminal investigation into O.U.R. as why Tim Ballard should be concerned.
“Criminal investigations into 501(c)(3)s are rare, extremely rare. If you do the paperwork right, a charity legally can pocket or eat up 95% or even more of donations in administrative costs, lodging, vehicles, salaries, whatever and there is little law enforcement and prosecutors can do. This tells us the evidence has to be overwhelming. This is not a simple misunderstanding, mistakes on documents- questionable claims or media spin. There is clear evidence, compelling evidence of intent. This might end up with a jury, so anything complicated in the tax code, laws or confusing questionable exchanges, sorry… prosecutors know better. Those statements by District Attorney Troy Rawlings to VICE and Fox 13 (regarding the investigation by his office)? I can assure you, his [Tim Ballard’s] attorneys have already prepared him for an indictment”
For the first time in his career and quite possibly his privileged life, Tim Ballard cannot discredit, intimidate or silence not just critics, but people who dared to question his ridiculous claims. Ballard cannot gain the confidence and/or influence over the media investigations and criminal investigations. He cannot call President M. Russell Ballard to fix this. Utah Attorney General Sean Reyes is facing his own investigations, not just pushing radical and disproven election fraud claims, but his relationship O.U.R. and Tim Ballard.
A Damning Analysis
Why a “question mark” rating?
According to CharityWatch, they have “concerns about this organization and/or is unable to provide complete rating information due to the organization’s nondisclosure of financial information. Please see the Analysts’ Notes section for a more detailed explanation.”
CharityWatch provides a comprehensive analysis into Operation Underground Railroad which serves as a dire warning to those wishing to ultimately “invest” in Tim Ballard and his special projects, rather than combating human trafficking.
According to CharityWatch’s analysts notes:
CharityWatch is providing a “?” rating for Operation Underground Railroad (O.U.R.) at this time due to our concerns related to a reported investigation into the organization, according to Fox 13 News of Salt Lake City, Utah. In an article published by Fox 13 Salt Lake City in October 2020, Davis County (Utah) Attorney, Troy Rawlings, confirmed that an investigation into Operation Underground Railroad is “ongoing,” and that his office has “received complaints” and is “in the process of reviewing those complaints.” Rawlings did not specify why O.U.R. is under investigation and would not release records concerning the inquiry to Fox News, according to the article, on the basis that doing so “would interfere with that investigation.” Fox 13 News also reported in the article that Rawlings, in an Instagram post, “implied [that] a local nonprofit was conducting illegal fundraising efforts by taking credit for arrests made by the Davis County Internet Crimes Against Children Task Force.” Rawlings did not name the local nonprofit in the post. An investigation by VICE World News touched on a similar concern. According to a December 2020 article published in VICE: “An investigation by VICE World News focused on OUR’s operations identified a divide between the group’s actual practices and some of its claimed successes. What we [VICE] found aren’t outright falsehoods but a pattern of image-burnishing and mythology-building, a series of exaggerations that are, in aggregate, quite misleading.” CharityWatch contacted Davis County Attorney Troy Rawlings by email and voicemail in June 2021 asking him to confirm the existence of an investigation into O.U.R. by his office, and asking if he was able to provide any further comment. As of July 15, 2021, Rawlings did not respond to our inquiries. In June 2021, CharityWatch also contacted O.U.R. via email to request copies of O.U.R.’s fiscal 2020 audited financial statements and Form 990 tax filing, and to ask for comment on the reported criminal investigation into its activities. As of July 15, 2021, we have not received a response from O.U.R. In the event one or both parties responds to our inquiries in the future, or if O.U.R. provides its updated financial documents to us, we may update our rating of Operation Underground Railroad at that time.
According to the Operation Underground Railroad (OUR) 2019 tax filing re: the existence of a family or business relationship among officers, directors, trustees, or key employees (IRS Form 990, Part VI, Section A, line 2), OUR reports:”Multiple Officers and Directors have a family relationship. Todd Reynolds (Director) is Tim Ballard’s (Founder) brother in law. Julianne Blake (Director) is Tim Ballard’s sister. Tevya Ware (CFO) is Tim Ballard’s sister in law. Mark [sic] Reynolds (Secretary) is Todd Reynolds’ brother.”[Todd Reynolds, Marc Reynolds, and Julianne Blake are reported as three of OUR’s five board members in 2019 (IRS Form 990, Part VII).]
Also according to the Operation Underground Railroad 2019 tax filing, OUR reports for Business Transactions Involving Interested Persons (IRS Form 990, Schedule L, Parts IV & V):(1) A transaction in the amount of $18,415 involving Kelly Wilson / Allred Jackson, “Board Member,” and described as “Tax return preparation.”(2) A transaction in the amount of $13,340 involving Austin Ware, “Child of Officer,” and described as “Employee.”[OUR reports Kelly Wilson as President of the Board. Tevya Ware is reported as the Chief Financial Officer (IRS Form 990, Part VII).]
According to the Operation Underground Railroad (OUR) 2019 tax filing, OUR reports receiving contributions of non-cash items on which it placed a value of $681,455 and donated services and use of facilities on which it placed a value of $167,138 (IRS Form 990, Schedule M and Schedule D, Part XI).[Note: CharityWatch generally excludes the value of in-kind (non-cash) donations of goods and services from its calculations of Program % and Cost to Raise $100. More information on how grades are calculated and the treatment of in-kind donations can be found on the Our Process page.]
According to the Operation Underground Railroad combined audit of December 31, 2019 (Note 2 re: Subsequent Events):”On January 30, 2020, the World Health Organization (‘WHO’) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the ‘COVID-19 outbreak’) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.”The full impact of the COVID-19 outbreak continues to evolve as of the date of this report [April 15, 2020]. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its operations, financial condition, or liquidity for fiscal year 2020.”
CharityWatch also stated concerns over Operation Underground Railroad having more than “three years of its operating expenses in reserve”. Which American Crime Journal uncovered from O.U.R.’s annual tax filings. Majority of their donor’s funds, nearly two-thirds are placed in savings accounts or invested in stocks and bonds.
According to CharityWatch their mission is “a nonprofit charity watchdog and information service, is to maximize the effectiveness of every dollar contributed to charity by providing donors with the information they need to make more informed giving decisions”.
Their goal is simple. From the CharityWatch website, “To research and evaluate the efficiency, accountability and governance of nonprofit organizations; to educate the public about the importance of wise giving; to inform the public of wasteful or unethical practices of nonprofits and provide recognition to highly effective and ethical charities; to advise CharityWatch members and conduct special investigations and evaluations of nonprofits; to expand and re-define our programs periodically to meet the continuing challenge of keeping the contributor informed“
The American Institute of Philanthropy (dba CharityWatch) was founded in 1992 by Daniel Borochoff. According to the CharityWatch website, Borochoff was “called for testimony on the nonprofit sector’s response to 9/11 victims in 2001; for commentary on charities’ response in the aftermath of hurricanes Katrina and Rita in 2005; and to contribute his expert opinion and CharityWatch’s research to a Congressional investigation in 2007 and 2008 related to wrongdoing and significant waste at charities purporting to help veterans. The Chronicle of Philanthropy published an in-depth profile on Daniel Borochoff in its article “An MBA’s Sleuthing Skills Puts Charities on the Hot Seat (PDF).”
The Board of Directors include,
Chairman Ray Lay who was the President and Founder, Golden River, Inc.
Treasurer James Vallone a retired Executive Vice President for JPMorgan Chase.
Secretary Clinton E. Berry who previously served as Senior Director of Worldwide Procurement for PepsiCo.
Non-profits are rarely Investigated
Criminal investigations into non-profits are almost non existent as the IRS rarely audits 501(c)(3)s and state authorities and the Department of Justice has little oversight or authority over them. Every Sunday, people all over this country will go to their respective churches. Pull on the same door handles are falling off the front door. They bring their own Bibles and hymns, because the church can’t afford decent ones for the congregation. They’ll all drop cash and checks into the collection plate. Many what they can barely afford and many what they can’t afford. Numerous times throughout the week, folks will see their pastor, his wife and kids. Each are driving a Mercedes Benz. The men are wearing tailored Armani suits or Adidas track suits. The ladies carrying their Louis Vuitton purses. These so-called men of God are living in million dollar homes, some even living in $5 to $10 million homes.
You’d think local, state or federal authorities can step in to stop this obvious fraud, but you’d be wrong.
They have little recourse. This is why organizations like The American Institute of Philanthropy dba CharityWatch are vital. It’s for both serious donors and those sparing a few bucks here and there. The concept of non-profits was simple when they were created. The idea was that churches and charities would provide goods, services and welfare for those in need- instead of local, state and federal government.
Not only do they not even scratch the surface, some even end up costing their respective state and federal government more money and welfare. Majority of these churches defraud their congregants, which the majority are already poor. Defrauding them out of thousands of dollars under the ruse of prosperity, planting or “sowing your seed” for the love of Jesus.
It is not only churches, but charities as well, especially those for veterans groups. There have been cases where men and women have died, leaving everything they own to veteran charities that ended up being frauds. Even popular ones like Wounded Warrior as come under fire. According to a 2016 report, only about 60% of donations end up in the hands of those in need.
Hundreds-of-thousands of people have donating to the cause of anti-human trafficking organizations, and while it may seem all silly when you get to the facts and the reality of it- these people truly believe that a million American kids are kidnapped and trafficked out of the United States. Some have donated their life savings to the cause, only for that money to end up invested in Tim Ballard’s “special projects” or “stocks and bonds”.
While I personally have no problem with people who are working full time managing or administering, providing expertise such specialists or doctors needed by non-profits, it should not be used as a “get wealthy” scheme. Salaries should be reasonable and somewhat competitive, yet not a road to becoming millionaires under the ruse of saving children, salvation or helping veterans. The poor and middle class have been exploited enough. Again and again, these fraudulent churches and charities use children and veterans to make fast cash. Their purpose is to get rich. Ultimately this hurts children and veterans, as people no longer want to donate to charities supporting those causes because of their association with fraud.
Sources and Further Reading: