Just days before ThurtenE Honorary’s annual carnival last spring, the group found itself in a sticky situation when media outlets reported that the Better Business Bureau questioned the fiscal performance for the Foundation for Children with Cancer—the St. Louis-based charity to which the honorary planned to donate carnival and fundraising proceeds.

Despite the charity’s controversial financial standings, the honorary stood behind the Foundation for Children with Cancer (FCC), and the charity now has an opportunity to reshape its reputation.

Henry Biggs, associate dean in the College of Arts & Science and faculty adviser to the honorary, found a lawyer for the FCC this summer through Washington University’s Justice Center. Dennis Kennedy, a lawyer for MasterCard who worked this case pro bono, helped the charity terminate a contract with the telemarketing company Charitable Resource Foundation.

FCC President Renee Verhoff claims this contract is the reason for the charity’s financial woes and unsatisfactory evaluations.

The FCC’s mission is to financially assist the families of children with cancer.

“By providing tangible and direct financial support, such as mortgage payments, insurance premiums and utility bills, families are given a greater opportunity to focus on their children’s treatment and recovery,” the mission statement on the organization’s Web site reads.

According to the Better Business Bureau (BBB), a leading organization that reviews and accredits businesses that meet certain standards of ethics, the FCC raises millions of dollars every year, but only 10 percent of this money goes to the charity’s intended beneficiaries.

This claim was further supported by the FCC’s 2007 tax form 990, which showed that the charity’s total revenue that year was $3.06 million, while their fundraising expenses were $2.46 million and direct expenses other than fundraising totaled $77,241.

Charity Navigator, the nation’s largest charity evaluator and an online guide assessing the efficiency and capacity of charitable organizations, gave the FCC a rating of zero stars for its efficiency and zero stars overall.

According to Verhoff, however, these figures and evaluations were not an apt representation of the charity itself and its mission, but rather of the charity’s contract with the Charitable Resource Foundation, which the FCC hired for fundraising purposes.

The BBB claims that nearly 90 percent of the charity organization’s revenue is swallowed into the contract.

Although the contract was not set to expire until 2012, Kennedy, according to Biggs, discovered that an addendum to the contract—which stated when the contract was set to expire—held no legal merit since the involved parties did not sign it.

The FCC submitted its intent on May 29 to terminate its contract with the Charitable Resource Foundation. On July 15, the Charitable Resource Foundation accepted the termination proposal and, as a result, the incident did not go to court.

The FCC will be completely free from the reigns of the contract by early 2010.

“Since we will not be using telemarketing anymore, this will drastically change our percentages,” Verhoff said. “They should start to flip so that the amount of money going toward programming costs will change to a higher percentage and the money going to administrative costs will go to a lower percentage, which is what the Better Business Bureau would like to see and is what we would like to see as well.”

Both Verhoff and Biggs said it would take a few years for the FCC to post the kind of financial numbers that meet the BBB’s standards, but were confident it would eventually happen.

Verhoff said she anticipates the FCC’s expenses to be split, with 50 percent of the money raised going to programming costs and 50 percent going to administrative costs.

The BBB, she said, typically looks for about 65 percent of the money that charities raise to go to programming.

Biggs calls the FCC a “truly wonderful organization,” but because of its past entanglements with the telemarketing company, it is “having difficulty connecting with folks” to raise money.

The FCC, however, hopes to receive some grants this year it was previously unable to get due to its poor standings.

Helping the charity out of the contract has been a rewarding experience, members of the Honorary said.

“It’s really a huge thing, and we’ve helped them in a way that we’ve never helped a charity before,” said senior Katy Orobello, the charity and alumni coordinator. “They were really in a debacle that was not malicious.”

Orobello said the honorary still has not decided where it will donate last year’s carnival’s proceeds, though they are working with the FCC to seek other alternatives.

“Right now we are trying to stick to FCC’s mission, because that is the mission we committed ourselves to, and we are looking into alternatives,” she said.

The 13 members of the honorary will meet in the next few weeks to collectively decide what to do with the money.

For now, the FCC is working to move forward and effectively serve the community.

“It could have turned out in a different direction, but it has turned out very positive,” Verhoff said. “We met some incredible young adults through this experience, and we really hope to continue this relationship.”