Kars4Kids Charity Loses Big on Real Estate

$29 Million in Gifts Translates to Just $6 Million in Programs

Lots of Losses: Kars4Kids gets thousands of cars donated by people who think they’re helping children. Little of the money actually went to programs, like this idyllic Jewish summer camp.
courtesy of oorah
Lots of Losses: Kars4Kids gets thousands of cars donated by people who think they’re helping children. Little of the money actually went to programs, like this idyllic Jewish summer camp.

By Josh Nathan-Kazis

Published January 20, 2012, issue of January 27, 2012.
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A multimillion dollar nationwide advertising campaign featuring an inescapable radio jingle and a freckle-faced boy in a convertible has brought the Orthodox Jewish charity known as Kars4Kids more than 60,000 donated vehicles a year.

Those gifts, worth $29 million, support Orthodox outreach to non-Orthodox Jews, including a fancy summer camp for Jewish children.

But Kars4Kids and Oorah Inc., an affiliated not-for-profit organization, lost nearly as much speculating on real estate in 2010 as they spent on programming.

The two closely linked organizations wrote off a combined $5.25 million in losses that year after lenders foreclosed on three separate real estate developments. A fourth development, foreclosed on in 2009, had earlier wiped out $3 million in donated funds.

Meanwhile, Oorah, the operation’s program arm, spent only $6.3 million of the $29 million collected by Kars4Kids on program expenses in 2010, despite the fact that the organizations hold a combined $39 million in assets.

“[Kars4Kids] promotional materials say that the donation will benefit children,” wrote Sarah Holloway, an expert at not-for-profit management and a professor at Columbia University’s School of International and Public Affairs, in an email to the Forward. “I don’t think donors would be pleased if they found out that some of these monies were going toward anything other than that programming and reasonable overhead.”

Jeffrey Stern, Oorah controller and chief financial officer, defended the organization’s financial practices. “We do keep our promise to donors that their gifts will benefit children, and we are proud of the fact that one way we do it is by planning and investing in the long term,” Stern wrote in an email to the Forward. He said that his organization’s investment program “actually exceeded” not-for-profit oversight standards.

This high-profile charity campaign has made news before. Kars4Kids has previously paid cash settlements to attorneys general in two states over its failure to identify its activities in advertisements as benefiting a specific religious group. In early January, a federal jury found that Oorah owed more than $300,000 in scholarships to a Staten Island Jewish day school.

Based in Lakewood, N.J., Oorah operates summer camps for boys and girls and offers mentorships, scholarships to Jewish day schools and other programs that seek to bring Orthodox Jewish life to non-observant Jews. The organization actively serves 2,000 families, according to Yehoshua B. Weinstein, Oorah’s director of outreach development.

“Our goal is to be able to offer them opportunities,” Weinstein said. “I think anybody who comes to an Oorah program — you would be touched, and it would make a difference in your life. That’s the point of what we’re doing. We’re not here to particularly change people, we’re here to be able to offer them different opportunities.”

Oorah’s summer camp facilities are relatively luxurious. The camps feature petting zoos, horseback riding and game rooms with video game systems. Oorah also offers a matchmaking program for the newly religious.


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