California lawsuit accuses charity of misspending donations
SACRAMENTO, Calif. (AP) — California is suing the charity Aid for Starving Children, alleging just a small portion of $105 million raised by the nonprofit went toward feeding hungry kids.
The lawsuit says the charity used the bulk of its donations for administrative purposes, with only $1.3 million going toward the group’s stated mission of feeding hungry kids. State Attorney General Xavier Becerra announced Thursday that the lawsuit also alleges the group misled donors by inflating contributions from drug companies.
Officials with Northern California-based Aid for Starving Children did not immediately return an email and phone message requesting comment.
The organization’s web site says it provides “food, water, education and medical supplies to starving and needy children worldwide.”
The lawsuit alleges that of $105 million raised between 2011 and 2018, $97.4 million was in the form of overvalued drugs donated by pharmaceutical firms. The drugs were overvalued because Aid for Starving Children based them on U.S. list prices, rather than the significantly lower prices in countries where the medicines were used, according to the filing.
The lawsuit also says most of the drugs sent overseas were for conditions not normally associated with starving children, such as menopause.
Of the $7.4 million in cash donations received during those 7 years, about $6.2 million went to “overhead, salaries, consulting contracts and fundraising expenses,” the suit says.
The lawsuit comes as California lawmakers consider a bill that would require greater financial transparency for charities in the state.