Cautionary Tales

First, a story about a "charity," from the NY Times:

WASHINGTON — BY all outward indications, the U.S. Navy Veterans Association was a leader in the charitable community. Founded in 2002 to provide support to Navy veterans in need, the charity recorded astonishing financial success. In its first eight years, it raised around $100 million in charitable contributions, almost all of it through a direct marketing campaign. The organization, headed by Jack L. Nimitz, boasted of 41 state chapters and some 66,000 members.  [My emphasis]

This would be a great story of charitable success, except for the fact that virtually everything about the association turned out to be false: no state chapters, no members, no leader with the name redolent of naval history. Instead, there was one guy: a man calling himself Bobby Thompson who worked from a duplex across the street from the Cuesta-Rey cigar factory in the Ybor City neighborhood of Tampa.

...[T]he money raised was real enough ... [b]ut little ever made it to the intended beneficiaries. In 2010, the scheme was unwound by two reporters for what is now The Tampa Bay Times, but not before Mr. Thompson had fled the state of Florida.

From June 2010, Mr. Thompson was on the run, the search for him hamstrung by the fact that no one had any real idea of who he was. Finally, on April 30, 2012, federal marshals tracked him down in Portland, Ore., finding him with a card to a storage unit containing $981,650 in cash and almost two dozen fake identity cards.

Earlier this month in Ohio, where the charity’s registration documents had been filed, the man arrested as Bobby Thompson was convicted on 23 felony counts, including fraud, theft and money laundering. Authorities have identified him as John Donald Cody, a former Army intelligence officer and Harvard Law graduate.

Read the whole story here. It's fascinating. Did you know there are about 59,000 charities in the country with the word "veteran" in its name?

If you're looking for a good charity where your bucks can make a real difference, consider Omo Child, about which I will write another time.

On another subject, via Kevin Drum I came across what I consider a pretty devastating piece about an outfit called GoldieBlox, by Felix Salmon of Reuters.

The company first came to public attention in September of last year, when it launched a highly-successful Kickstarter campaign which ultimately raised $285,881. Like all successful Kickstarter campaigns, there was a viral video; this one featured a highly-photogenic CEO called Debbie, a recent graduate of — you probably don’t need me to tell you this — Stanford University. And yes, before the Kickstarter campaign, there was “a seed round from friends, family and angel investors”. When the viral video kept on generating pre-orders even after the Kickstarter campaign ended, GoldieBlox looked like a classic Silicon Valley startup: young, exciting, fast-growing, and — of course — disruptive.

Not wanting to mess with a proven formula, GoldieBlox kept on producing those viral videos: “GoldieBlox Breaks into Toys R Us” was based on Queen’s “We Are The Champions”, and got over a million views. But that was nothing compared to their latest video, uploaded only a week ago, and already well on its way to getting ten times that figure. This one was based on an early Beastie Boys song, “Girls”, and deliciously subverted it to turn it into an empowering anthem.

Under what Paul Carr has diagnosed as the rules of the Cult of Disruption, GoldieBlox neither sought nor received permission to create these videos: it never licensed the music it used from the artists who wrote it. That wouldn’t be the Silicon Valley way. First you make your own rules — and then, if anybody tries to slap you down, you don’t apologize, you fight. For your right. To parody.

In a complete inversion of what you might expect to happen in this case, it is GoldieBlox which is suing the Beastie Boys. And they’re doing so in the most aggressive way possible. There’s no respect, here, for the merits of the song which has helped their video go massively viral and which is surely helping to sell a huge number of toys. Instead, there’s just sneering antagonism ....

I smell libertarians.