'Who's Saving the Children?'

 HIGHLIGHT: Sam Donaldson reports on the apparent feebleness of the famous charity, Save the Children's, efforts on behalf of American children and investigates questions about its fund-raising and distribution.

 ANNOUNCER: PrimeTime continues. From Washington, Sam Donaldson.

 SAM DONALDSON: Good evening. Diane is off tonight. During this season, you may have seen the ads for a charity named Save the Children, a U.S.-based organization with 2,400 employees that takes in almost $100 million a year. It works on behalf of children worldwide and there have been many articles and television reports about the good it's done abroad. Eighty-five percent of its work is done overseas.

 But we wondered what it does for the children it asks people to sponsor right here in the United States. We wanted to see what this charity actually delivers to children in this country and whether its ads, to which so many donors respond, fairly represent what it actually does.

 What we found was a charity dedicated to helping children, but which appears to be falling short in ways you may find troubling.

 [voice-over] These children are growing up on Native American lands in remote corners of Arizona.

 1st CHILD: I'm good at basketball.

 SAM DONALDSON: You're good at basketball?

 [voice-over] Many of them need help and a lot of caring Americans believe they are providing it by contributing money through an organization named Save the Children.

 ANNOUNCER: [television commercial] You can help ease the pain by becoming a Save the Children sponsor.

 SAM DONALDSON: [voice-over] You may have seen their T.V. ads.

 ANNOUNCER: [television commercial] Now is the time to rescue one fragile girl or boy.

 SAM DONALDSON: [voice-over] People call the 800 number and sign up to contribute $20 a month to sponsor a child. That's $240 a year. They receive the child's name and picture and are told that most of their money goes for programs that benefit that particular child.

 SALLY STRUTHERS: [television commercial] More than 80 cents of every dollar we spend goes to programs to benefit needy girls and boys.

 SAM DONALDSON: [voice-over] Until recently, Sve's publicized pie chart claimed that almost 85 percent of the ney spent went for children's programs. Save means that toapply to its combined worldwide operations. But what about programs here in the United States alone? From the advertising, ight not sponsors believe it also applies to the dollars they'e given for U.S. children? And is that correct?

 PAM WINNICK: [sp?] It's absolutely incorrect.

 SAM DONALDSON: It's incorrect?

 PAM WINNICK: Absolutely.

 SAM DONALDSON: [voice-over] Pam Winnick had been Save the Children's general counsel for 13 months until she resigned in frustration last year, concerned that the advertising was deceptive.

 PAM WINNICK: Taking away the salaries, the office space, directly benefiting the children, I- I would put the real number as anywhere from zero to 30 percent in most sites in the United States.

 SAM DONALDSON: Zero to 30 percent?

 PAM WINNICK: Yes.

 SAM DONALDSON: [voice-over] She personally visited many of Save's domestic operations then reported her findings to Save's president, Charles McCormick [sp?], and other senior staff. But, she says, to senior staff money raising had become all-consuming.

 PAM WINNICK: I can't remember any conversation or any discussions about the appalling conditions of children in this country and around the world.

 SAM DONALDSON: Then what did they talk about?

 PAM WINNICK: They talked about - to use a metaphor - how to keep the boat afloat and how to make it bigger.

 SAM DONALDSON: How to raise more money.

 PAM WINNICK: Exactly.

 SAM DONALDSON: [voice-over] But it's not just the former general counsel who's pointing a finger. Shelby Miller, a Ford Foundation alumna and recognized authority on charities, was hired by Save the Children twice since 1990 to evaluate their domestic operation.

 SHELBY MILLER: Well, right now, a lot of your money never leaves Westport, which is the headquarters for the program. Some money does get out to the field, but there's really a lack of fit here between the promise to the sponsors and the promise to the families.

 SAM DONALDSON: [voice-over] We wanted to see for ourselves how Save the Children operates, so we came here to Arizona, where over 5,000 children are said to be under sponsorship. We wondered if the children knew their sponsors and, more importantly, what are the benefits they are receiving from the money collected in their name?

 We visited Tuba City [sp?], within the Navajo land near the Grand Canyon, where we met some of the children - with their parents - Save had signed up for sponsorship.

 2nd CHILD: I always wrote to her, but I never heard anything.

 SAM DONALDSON: [voice-over] Connie DiLego helped run the local Save operation along with Vanessa Brown [sp?] until they both quit in disgust in 1993.

 CONNIE DILEGO: I believe that we're told 85 percent of the amount that the donor gives would be returned to the community.

 SAM DONALDSON: Okay. Was it?

 CONNIE DILEGO: No. Not anywhere near that.

 VANESSA BROWN: Far from it.

 SAM DONALDSON: How much was returned to the community?

 VANESSA BROWN: For 1989, we received a check for $2,600.

 SAM DONALDSON: Two thousand, six hundred for 400-some-odd-

 VANESSA BROWN: For the year.

 SAM DONALDSON: -children?

 VANESSA BROWN: For the year.

 SAM DONALDSON: [voice-over] Brown and Dilego say that from 1990 to 1992, they got varying amounts, but never more than a few thousand dollars. And they also cite programs in job creation and eye care which they say were failures. Save told us it had spent more than $53,500 serving Tuba City in 1995, but only about $17,000 of that was in direct community grants. The rest was for staff and overhead.

 We wondered if Tuba City was singularly unrepresentative of Save's domestic operations. But when we visited the Tohono O'Odham nation near Tucson, we found the same pattern.

 [interviewing] Has your sponsor written you a letter?

 3rd CHILD: Yeah.

 SAM DONALDSON: Do you know who your sponsor is?

 3rd CHILD: Uh-uh.

 SAM DONALDSON: [voice-over] Save has 1,200 children under sponsorship here. If you do the math, $20 a month times 1,200 amounts to $288,000 a year collected from sponsors. And if, in fact, over 84 cents of every dollar goes for children's programs, this tribe should be getting something around $240,000 a year for its children every year.

 We tried to find it. We were told that Save contributed about a quarter of the cost of building this swimming pool in 1986. We asked Dennis Jose [sp?], Save's tribal representative, and Renee Paisano Trujillo [sp?], Save's Arizona program specialist, what Save has done since then.

 DENNIS JOSE: We have through the community some traditional dance groups.

 SAM DONALDSON: Last year, how much for tribal dancing?

 RENEE PAISANO TRUJILLO: There wasn't a tribal dancing program last year.

 SAM DONALDSON: The year before?

 RENEE PAISANO TRUJILLO: The year before, we- I would- I could guess at that only and I don't think that would be fair.

 SAM DONALDSON: [voice-over] Both of Save's representatives kept telling us about health, education and prevention programs for the children, which sound wonderful in the abstract, but what is the reality?

 [interviewing] Tell me about technical assistance and how Save the Children does that.

 RENEE PAISANO TRUJILLO: Well, by building projects, by providing seed funds to build seed crystals for literacy projects.

 SAM DONALDSON: When was that?

 RENEE PAISANO TRUJILLO: Those are projects that are occurring right now. There are partnerships developed at this-

 SAM DONALDSON: If I can-

 RENEE PAISANO TRUJILLO: -at this point.

 SAM DONALDSON: -come to this community tomorrow, can I find a literacy project that's in place?

 RENEE PAISANO TRUJILLO: They are being developed. The literacy projects-

 SAM DONALDSON: You mean, it's something in the future.

 RENEE PAISANO TRUJILLO: I wouldn't say too far in the future.

 SAM DONALDSON: [voice-over] Over and over, we were told of programs in the pipeline, but we kept pressing to understand how $240,000 a year is being spent in the meantime. Finally, Mr. Jose told us Save had bought computers for school rooms.

 [interviewing] How many?

 DENNIS JOSE: Four computers.

 SAM DONALDSON: Four computers.

 DENNIS JOSE: And accessories, yes.

 SAM DONALDSON: Over how many years?

 DENNIS JOSE: In the past four years.

 SAM DONALDSON: Past four years.

 DENNIS JOSE: Uh-huh.

 SAM DONALDSON: [voice-over] Later, Save told us it was actually six computers over four years.

 What was the explanation for what we had discovered: lots of children sponsored, apparently very few dollars being spent on them? We went to Save's Westport, Connecticut, headquarters to find out. We talked to Save's president, Charles McCormick, who showed us the gift shop where souvenir items are sold, like neckties. And McCormick spoke proudly of Save's work.

 CHARLES MacCORMACK: We have 63 years of knowledge of how to deliver value-added programs to children in communities.

 SAM DONALDSON: [voice-over] As to where the sponsor money went, McCormick acknowledged that a large proportion of it is used for staff salaries and other management and fund-raising activities. That's because other funds Save receives from U.S. government and foundation grants are limited in how they can be used. And, McCormick insisted, paying staff salaries directly contributes to children's programs.

 But we still wanted to know how Save could be grossing $288,000 a year over several years near Tucson and not have more on the ground to show for it than a partially funded swimming pool and six computers.

 [interviewing] Now, is that delivering over 84 cents of every dollar of sponsorship to those children?

 CHARLES MacCORMACK: Let me start again with- with a main concept for us, and that is this concept of- of trying to also bring in additional funds and-

 SAM DONALDSON: Well, what is the answer to my question? Where is the money?

 CHARLES MacCORMACK: Right. If- but just let me say that the goal is to involve the community. We work with community groups-

 SAM DONALDSON: But you've been collecting $288,000 a year. Where's the money?

 CHARLES MacCORMACK: We work with community groups to identify programs that will work over time.

 SAM DONALDSON: But where's the money that I've been talking about for that particular reservation, Mr. McCormick?

 CHARLES MacCORMACK: We- we found that of- of all those programs, about 3 percent were not meeting our goals.

 SAM DONALDSON: Mr. McCormick said to me, 'Over 97 percent of our programs work.' Does that figure strike you as being correct?

 SHELBY MILLER: No. It does not. In the small communities where they operate, many times most of the year was spent in planning or there was no program. And often the children who were sponsored received no services.

 SAM DONALDSON: [voice-over] In a letter to us after our interview, McCormick said more than $158,000 had been spent on the Tohono O'Odham tribal lands in 1995, much of it, he acknowledged, for consultants and staff salaries and overhead in Save's Albuquerque and Westport offices.

 It is in such areas of spending that Save's book-keeping becomes controversial. Consult the charity's spending chart, and of the three categories - management, fund-raising and children's programs - children's programs appears to be by far the largest. But much of that is for salaries up and down the organizational line and for some other items of questionable applicability.

 [interviewing] You listed 'D.C. liaison' at $105,000 as a program cost. Now, how does a D.C. liaison program directly help children?

 CHARLES MacCORMACK: That is a person whose task it is to identify funding sources that are available for the communities where we work.

 SAM DONALDSON: Then that's a fund-raising cost.

 CHARLES MacCORMACK: That is a program packaging cost to see-

 SAM DONALDSON: That's a fund-raising cost, you've just told me. How about $252,000 appropriated from your craft shop and catalog service as a program directly helping children?

 CHARLES MacCORMACK: You know, let me say that I have not gone through the- the whole list of assignments.

 SAM DONALDSON: [voice-over] It turns out, when the numbers are stripped bare, that much of the money goes for fund-raising, staff salaries and overhead and for programs that simply aren't yet in place or aren't working well. Save's president, Charles McCormick, says the problems are being corrected.

 CHARLES MacCORMACK: We have a small group of programs that- that have not worked up to our expectations. We have been working on cleaning those programs up.

 SAM DONALDSON: [voice-over] Recently, Save has reduced its field staff and shut down a number of sponsorship programs in the United States because they weren't effective, including one at the Waltersville School in Bridgeport, Connecticut, just 20 minutes up the road from Save's Westport headquarters.

 Save gave the school $10,800 in 1994 to pay for a writing contest. Save staff members had conducted some parent training seminars over the years and certain other Save programs were available elsewhere in Bridgeport for the general community.

 But principal Roberto Rodriguez [sp?], who praised Save for this help, seemed dumbfounded when we showed him how Save had been collecting on his 400 sponsored students $96,000 a year, of which he had seen very little.

 ROBERTO RODRIGUEZ: If that is true, it's not fair, not for the students. I think we can do a lot of beautiful things for the students that we have over here with that amount of money.

 SAM DONALDSON: [voice-over] McCormick insists that failures like Waltersville School are the exception. He points to Appalachia, where Save the Children began some 60 years ago, and where local social workers do speak highly of its programs there.

 1st SOCIAL WORKER: We wouldn't have this day care center without Save the Children.

 2nd SOCIAL WORKER: We would not be able to provide the quality of service that we now have if we didn't have Save the Children.

 SAM DONALDSON: [voice-over] Consultant Shelby Miller agrees some programs like the ones in Appalachia are successful, but she says those are, in fact, the real exception.

 Twenty months ago she delivered her last report on how to improve the charity's impact overall.

 SHELBY MILLER: I recommended that they provide a core service for every child.

 SAM DONALDSON: Was that done?

 SHELBY MILLER: No. Not to date, that I have seen. Another recommendation was to have staff that were well schooled and well acquainted and experienced in early child development.

 SAM DONALDSON: Was that done?

 SHELBY MILLER: No. Not to the best of my knowledge. Nothing that I have seen.

 SAM DONALDSON: [voice-over] But Save may have no choice but to do something soon.

 RICHARD BLUMENTHAL: [sp?] We have serious questions about how Save the Children is using these dollars, compared to what it's telling people.

 SAM DONALDSON: [voice-over] Richard Blumenthal, the attorney general of Connecticut, has opened an investigation into the charity's ad practices.

 RICHARD BLUMENTHAL: The impression that's created by the literature, by the T.V. ads may well be misleading and perhaps purposely so.

 SAM DONALDSON: And, in fact, if the advertising has been misleading, what will you do?

 RICHARD BLUMENTHAL: First, demand that it be corrected. Second, if it's not corrected, go to court.

 4th CHILD: I asked them, like, what it's like where they live, what the temperature is, because it gets real hot out here in Arizona.

 SAM DONALDSON: [voice-over] We showed pictures of some of the children we met at the Tohono O'Odham tribe to their sponsors, the people who've been sending in the money each month.

 5th CHILD: [unintelligible]

 SAM DONALDSON: Where does she live?

 5th CHILD: In Houston.

 SAM DONALDSON: [voice-over] And we showed the sponsors what we'd found in our investigation.

 DENNIS JOSE: -through the community some traditional dance groups.

 SAM DONALDSON: [voice-over] We had uncovered no misappropriation of funds for personal gain, but we'd found lots of children who are not receiving the benefits their sponsors may reasonably think they are.

 1st SPONSOR: From what I know, the good they do far outweighs the bad, so I have a positive slant on what I know, even now.

 2nd SPONSOR: I think what is being exposed, if there are potential problems, it needs to come out.

 3rd SPONSOR: I'm disappointed. This will certainly make me look more carefully at my own charitable contributions.

 SAM DONALDSON: Two final notes. First, a reminder that we looked only at Save the Children's domestic operations. Most of its work is done abroad. And second, Save's president, Charles McCormick, told us over half a million dollars has been earmarked for communities in the Southwest, only awaiting spending plans.