Charitable Donations in Crisis

People choose to donate because they believe in the cause or trust the charitable organization to make a positive difference. However, the charity sector has suffered a number of scandals in recent years, starting a worrying trend in which fewer people are giving to charity. The lack of transparency in the financial management of charities and several cases of misappropriation have led people to believe that their hard-earned money is not being well spent when donated.

There is an ongoing investigation surrounding the controversies of Yoon Mee-Hyang, the head of the Korean Council for Justice and Remembrance for the Issues of Military Sexual Slavery by Japan, exploited the survivors and misappropriated donations. Such allegations on the advocacy group began after one of the surviving victims of Japan's wartime sexual slavery, Lee Yong-soo, revealed in a press conference that the group never used citizens' donations for the benefit of the victims.

The group used donations from Hyundai Heavy Industries to purchase a house named a “healing center” in 2013 for 750 million won. However, the surviving victims claimed that they never had the opportunity to live at the healing center. Appointed as “property manager”, Yoon Mee-Hyang’s father has been residing in the property, and has received a total of 75.8 million won from the group for managing the house, during which the house was rented to different organizations on several occasions.

Financial records from 2018 included a spending of 33.39 million won from donation money at a beer hall. There were also suspicions that donations were used to support Yoon’s daughter studying in the United States. As much as comfort women received mounting support and donations from the Korean society, citizens have expressed their shock and disappointment towards the group. Yet, the former leader of the civic group refused to abandon her parliamentary seat.

In 2018, two charity workers from the “New Hope Seeds” organization were also arrested for habitual fraud and embezzlement over 12 billion won. Established in 2012 to fund the education of underprivileged children, the group collected over 12 billion won from 409,000 donors, but only used 200 million won for the children. The investigation revealed that they spent the money buying houses, high-end cars, and taking luxury vacations overseas.

An alternative people find to prevent such financial mismanagement of organizations is to fund individuals directly. On the one hand, it has become easier for underprivileged individuals to get their story known to the public and receive funding, due to the widespread use of social media platforms such as Facebook, Instagram, and Twitter. However, this has also made it easier for mal-intended individuals to exploit public sympathy and appropriate the donation money for illegitimate purposes. A well-known case is the ‘Molar Daddy’ scandal in 2017.

The 35-year-old man has received public attention years ago for being a loving and caring father after local media reported on his effort to raise donations for his daughter, who was suffering from a rare medical condition that causes disfigurement of the jaw and teeth. He had the same condition as his daughter, and received numerous surgeries with the donation money. Left with only one molar tooth, Lee Young Hak earned the nickname "Molar Daddy". After receiving 1.3 million dollars of donation from 2005, he was admitted to the police in 2017 for sex trafficking, murder, and using donation money to maintain a lavish lifestyle.

Many non profit organizations have lost donors over the years due to mounting controversies concerning charitable donations and their transparency. According to data from Statistics Korea, donation trends have been declining, from 29.9% in 2015 and 25.6% in 2019. However, government regulations can play a critical role to regain trust and confidence in the charity sector. Amid the COVID-19 crisis that devastated many underprivileged families, we hope to see a brighter prospect in charitable donations.