Childhelp Responds to News Channel 5
Posted 02/18/2014 by
To: Valued Childhelp Team Members, Donors and Stakeholders
From: Jim Hebets, Childhelp National Board Vice President
RE: CBS 5 News Report
Date: February 17, 2014
Dear Friends and Family of Childhelp,
On behalf of Sara O’Meara and Yvonne Fedderson, I have been asked to provide you a memo regarding a recent series of events that have occurred with the Channel 5 affiliate of CBS News here in Phoenix, AZ.
Earlier this past week, Childhelp’s headquarters was contacted by an investigative reporter from Channel 5 named Morgan Loew. He posed several questions to our Vice President of Communications, Daphne Young. After Daphne contacted Sara and Yvonne for guidance, the reporter was referred to me.
Mr. Loew expressed a desire to do a television interview in which he intended to ask what he described as a small group of questions. He promised that there would be no surprises and that we would be treated fairly and honorably. The questions that he would be seeking answers to were as follows:
- How could the two Founders of Childhelp, Sara and Yvonne, afford to live in what he called a “mansion”? And, was Childhelp somehow paying for their home?
- How did Childhelp justify paying Sara & Yvonne $250,000 each in their roles as CEO and President?
- Did Sara and Yvonne even work full time?
- Why should anyone believe that they actually successfully perform the duties associated with being CEO and President?
- Why should the City of Phoenix, who is now paying approximately $500,000 per year toward the cost of the Advocacy Center in downtown Phoenix, be using tax payer dollars to fund their salaries?
I met with Mr. Loew on Friday morning for the purpose of completing the television interview. He once again assured me that he had no ill intentions and that he was seeking sincerely to simply investigate the allegations. I provided him the following feedback:
- The home in which Sara and Yvonne reside was provided by Yvonne’s former husband (now deceased) as a gift shortly before his death. The home was free and clear and had no mortgage debt of any kind.
- I explained to Mr. Loew that both Sara and Yvonne had worked for Childhelp for more than 55 years each. For more than the first 20 years of their service, they worked for free. Each of them was married at the time and their husbands provided sufficient income for them to be able to receive no compensation. When Sara’s husband passed away in approximately 1982, she no longer had outside income and needed to begin to draw a salary. This was approximately 23 years after Childhelp was founded in 1959. Yvonne’s husband passed away several years later, at which time she began to draw a salary. I explained to Mr. Loew that I have spent 44 years of my career working in the executive compensation, insurance and benefits arena. I explained that we serve clients ranging from fortune 100 companies to fortune 1000 companies to a wide variety of mid to large sized privately owned businesses and additionally, a number of tax exempt non- profits. I also explained that I had a great deal of familiarity with the issues surrounding how to reasonably justify appropriate levels of compensation. I asked Mr. Loew if he was familiar with the annual study provided in the AZ Republic Newspaper that transparently revealed the annual compensation for the three highest paid executives in each of those charities? He said he had not seen that kind of report previously. I asked him why he was singling out Childhelp and not any of the other charities listed on the report. He would not answer the question. I reminded him that Childhelp was a national charity, not just an AZ charity and I pointed out that Sara and Yvonne’s salaries seemed extremely appropriate when compared with the others on this study. I reminded him that Sara and Yvonne’s salaries should have been higher yet to make up for the many years in which they took no compensation and for the fact that they were running a national, rather than a local charity.
- I assured Mr. Loew that our financial audit fully validated that Sara and Yvonne worked 40 hours per week. I reminded him that I had first-hand knowledge that Sara and Yvonne virtually always worked far more than 40 hours per week. In addition to late night, holiday and weekend work for the organization, Childhelp’s Founders have made a considerable financial investment through millions in loans, donating funds and countless in-kind gifts, such as shopping for the children at Childhelp Villages as if they were part of their family. During the recession, Childhelp had a $7 million note-holder that went bankrupt and $3 million in federal earmarks that had annually sustained the organization were canceled overnight. As donations dried up, corporate giving was less prolific and at- risk populations required services like never before, Sara and Yvonne mortgaged their own free and clear paid-off property to sustain Childhelp so that no children were left behind.
- I explained to Mr. Loew that the titles associated with the charitable world often vary widely when compared to the titles used in private industry. Some titles are similar and some are unique to the world of charity. Titles such as President, CEO, CFO, COO and Executive VP often have some similarity to the traditional business world. The title of Executive Director is often unique to the world of non-profit. I reminded Mr. Loew that Sara and Yvonne’s duties have often far exceeded many of the responsibilities associated with their titles. In the not-for-profit world, these two women have carried the additional burden of having to be the principal architects of Childhelp’s fundraising activities. They also spend endless hours building volunteer groups that help support the children and families we serve. Additionally, Sara and Yvonne devote a great deal of time with a variety of legislative and governmental leaders in an effort to help shape the laws and regulations protecting our children. Most importantly, I suggested to Mr. Loew that the best evidence of the core competency of Sara and Yvonne and their roles as leaders could be found in the fact that for more than 55 years, they have pioneered and led the Childhelp organization from 1 employee and 1 child being served to now 55 years later, successfully having served millions upon millions of children around the world. They have built an organization with approximately 600 employees. They have sustained and persevered and succeeded when many others have long since fallen by the wayside.
- I explained to Mr. Loew that the City of Phoenix has in no way ever paid any portion of Childhelp’s Founders salaries. I explained that his belief about the City contributing $500,000 toward the cost of the Advocacy Center was a false premise for then believing that he could somehow construe that the AZ taxpayers were paying their wages. As you all know, the City of Phoenix is expressly prohibited from paying the bills of a charity unless these expenses were in fact, expenses that the City would otherwise have to pay on their own. I explained to Mr. Loew that there are advocacy centers all over the U.S. I explained to Mr. Loew that the cities and municipalities in which they were located virtually always paid all of the costs associated with the advocacy centers, since these centers were caring for the physically and sexually abused children in their communities. I explained to Mr. Loew that for the past 15 years, the City of Phoenix had been blessed by the generosity of Childhelp and its donors because we, rather than the City of PHX, had paid the overwhelming preponderance of the expenses of what would have been the dominate expense of the City itself. I further explained to Mr. Loew that Childhelp was no longer in a position to continue to contribute such a significant portion of the expenses as a gift to the City. The City Council voted unanimously to pick up a greater share of these expenses. The City of PHX created a contract, in which they specifically identified the expenses that they (and the AZ taxpayers) would pay. These expenses included the rent, utilities and maintenance of the location we occupy. It also included the salaries of a small number of the staff actually specifically working at the Advocacy Center. I invited Mr. Loew to reach out to the Mayor, the County Attorney and the Chief of Police to verify this information. I don’t believe he has reached out to these people as of this time.
Shockingly, CBS has begun to air a series of “teasers” inviting its viewers to tune in next Tuesday night to learn more about why AZ taxpayers are paying the wages of $500,000 combined for Childhelp’s two Founders, Sara O’Meara and Yvonne Fedderson. In response to this obviously misleading attack, Childhelp has engaged the legal counsel of Snell and Wilmer Law Firm. I have attached for your review their response to the Executive Management at CBS Channel 5. I have personally communicated with Bill Montgomery, our County Attorney and Greg Stanton, the Mayor of Phoenix. I believe both stand ready to strongly support the ongoing efforts of Childhelp and hopefully, to help the Leadership at Channel 5 cease and desist with their materially misleading promotion.
Should any of you be contacted by Channel 5 for comment or feedback, we would encourage you to refer them to our legal counsel at Snell and Wilmer. Childhelp will vigorously defend itself against false accusations. On multiple occasions, I strongly encouraged Mr. Loew to please be careful, thoughtful and thorough before he attacked the reputation of Childhelp and/or its Founders.
Childhelp was transparent in moving forward with the interview and transparent in all responses. The bottom line is that Childhelp has not misused any tax payer money. As I’ve maintained, the City of Phoenix agreed to share in a greater way with costs association with the Childhelp Children’s Center of Arizona. These are costs the City would have otherwise borne in their entirety. There seems to be an implied allegation that these monies somehow are being used to pay our CEO and President’s compensation. There seems to be further implied allegation that somehow as a chain reaction the Arizona taxpayers are shoulder such a cost. It appears during this time of ratings sweeps, CBS Chanel 5 is using teaser ads that at least have the innuendo that Childhelp is guilty of these issues. Please note that this is patently false. It is unfortunate CBS felt the need to sensationalize the story by making misleading statements to promote the broadcast but we hope the story itself will be as honest, open and truthful as my statements during the interview. We will be watching the final segment on Tuesday to decide if further action is warranted.
We welcome the feedback from any or all of you on these very sensitive issues.
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