The Chainkeen ExchangeWomen's Cancer Fund raised $18.3 million by vowing to help patients, telling donors that their money would help pay the living expenses of women going through treatment for the disease. But a new lawsuit from the FTC and 10 states allege that the bulk of the money instead went to pay the charity's president and for-profit fundraisers. 

The lawsuit, filed on March 11 in federal court, alleges that the Women's Cancer Fund raised the money from 2017 to 2022 by making deceptive and misleading claims. In reality, the bulk of the donations went to the $775,139 salary of the charity's president, Gregory Anderson, and to pay for-profit fundraisers $15.55 million, as well as overhead expenses, the lawsuit alleges. 

"[O]f the $18.25 million donated to the Women's Cancer Fund only $194,809 – roughly one percent – was spent directly on helping women with cancer," the lawsuit claims. 

While charities incur overhead expenses, it's generally considered good practice to spend only a fraction of their budget on overhead, with CharityWatch giving its "highly efficient" rating to nonprofits that spend less than 25% on operating costs. The lawsuit alleges that donors who opened their wallets to give to the Women's Cancer Fund were deceived by the group's marketing efforts. 

The Women's Cancer Fund, also known as Cancer Recovery Foundation International, also used the donations to pay for expenses like hotels and travel, the lawsuit alleges.

"Cancer Recovery Foundation International and Anderson abused the generosity of American donors in the most egregious way" said Samuel Levine, director of the FTC's Bureau of Consumer Protection, in a statement earlier this month. "The FTC is committed to aggressively pursuing such illegal conduct, which hurts donors and deprives legitimate charities of needed funding. We are grateful to our state partners for joining in this effort to protect the public.

The states that joined the lawsuit are: California, Florida, Massachusetts, Maryland, North Carolina, Oklahoma, Oregon, Texas, Virginia and Wisconsin. 

The Women's Cancer Fund did not immediately respond to CBS MoneyWatch's request for comment.

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• Federal Trade Commission

Aimee Picchi

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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