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A recent CNN report raises questions about Operation Baghdad Pups, and the charity that oversees the program, SPCA International.

CNN, whose sister network presented a positive and heartwarming portrayal of the program last year,  found that SPCA International spent nearly all $27 million it received in donations to raise more money through a direct mail company.

The report also said SPCA International “misrepresented” Baghdad Pups on its tax filings, and that it hired an officer for that program with a “questionable background.”

Two immediate thoughts:

One, in an ideal world, which of course we’re not in, it would have been nice of CNN, or even its less probing sister network, HLN,  to do its digging before tugging at our heartstrings to the extent we cough up money.

Two, with animal charities becoming big business, where should the line be drawn when it comes to how much of the money they rake in actually goes to helping animals?

A charity needs to spend money to raise money, of course, but Bob Ottenhoff, president of the charity watchdog group GuideStar, told CNN that the SPCA International’s tax records raise “a number of red flags.”

“No. 1, there is an enormous amount of money going into fund-raising,” Ottenhoff said. “It’s not unusual for a nonprofit to fund-raise. In fact they need to fund-raise. But this organization has an enormous amount of fund-raising costs, certainly relative to the amount of money being spent.”

Of the $14 million raised in 2010, SPCA International reported it spent about $60,000, less than 0.5%, on cash grants to animal shelters across the United States.  About $450,000 — about 3% of the total raised in 2010 — went to bring back animals from Iraq and Afghanistan as part of its “Baghdad Pups” program.

The CNN report seems to make much of the fact that most of those animals weren’t actual members of the armed services — but, from our coverage of the organization, it never seemed to making the claim that they were.

Baghdad Pups is a program that “helps U.S. troops safely transport home the companion animals they befriend in the war zone,” it states on the website.

As CNN put it, “the charity admitted that only 26 of the nearly 500 animals transported to the United States from Iraq and Afghanistan were actually service animals. The rest were stray animals … And those 26 service animals were not attached to military K-9 units but belonged to Reed Inc., a private contractor that built roads in Iraq and Afghanistan.”

While dogs abandoned by contracting companies have been a concern of the program, stray animals, as I understood it, were what the program was all about — seeing that, in cases where they bonded with soldiers, they had a chance to come home with them.

While the CNN report may have been barking up the wrong tree in that regard, it was on the money in other ways — namely, in looking at what happens to the money.

SPCA International funneled nearly all the donations to Quadriga Art, one of the world’s largest direct-mail providers to charities and nonprofits. The payments to Quadriga Art and its affiliated company, Brickmill Marketing Services, were for publicizing the organization and helping it raise more funds.

It is the same company hired by two veterans charities that spent tens of millions of dollars for its services,  triggering a Senate investigation last month. One of the charities,Washington-based Disabled Veterans National Foundation, collected nearly $56 million in donations over the past three years yet paid Quadriga Art more than $60 million in fees, raising questions about whether it should retain its tax-exempt status.

SPCA International is still $8 million in debt to Quadriga Art, according to a spokeswoman for the direct-mail firm.

Lat week’s CNN report also brought up previous problems Operation Baghdad spokeswoman Terri Crisp encountered while working on behalf of animals.

Crisp, who appeared on CNN’s sister network, HLN, last year with two dogs rescued from Iraq, is the former head of a California-based animal rescue charity called Noah’s Wish. It took in $8 million in contributions to support its work “rescuing and caring for the animal victims of Hurricane Katrina.” An investigation by the California attorney general was looking into whether that money was being used for that purpose when a settlement was reached in 2007.

Crisp, while not admitting to any wrongdoing, agreed to return $4 million in donations, and to not ”serve as an officer, director or trustee or in any position having the duties or responsibilities of an officer, director or trustee, with any non-profit organization” for five years.

Best Friends Animal Society is the most trusted U.S. animal welfare organization, and the one the public says it’s most likely to donate to, according to a Harris Poll EquiTrend study

Harris Interactive’s 2012 study named Best Friends a “Brand of the Year” for the second year in a row.

Each year, Harris Interactive measures consumer sentiment toward for-profit and non-profit brands and evaluates both on factors including familiarity, quality, trust, leadership, emotional connectedness, likelihood to recommend and performance.

Best Friends Animal Society was named a category winner along with such organizations as the American Red Cross, Goodwill, Girls Scouts USA, Stand Up to Cancer and Food for the Poor.

The 2011 Harris EquiTrend poll named Best Friends as the nonprofit “Brand of the Year” when all nonprofits were grouped in one category. In 2012 the study created categories for nonprofits: animal, environmental, health, international, social services, disability and youth interest.

“We are extremely honored that for the second year in a row Harris Interactive and the people that participated in the poll pointed to Best Friends Animal Society as the nonprofit animal welfare organization with the highest brand equity,” said Gregory Castle, chief executive officer of Best Friends Animal Society.

Established in 1984, Best Friends Animal Society operates the nation’s largest no-kill animal sanctuary for abused and abandoned animals.

We don’t really know that Jan Van Dusen is crazy, we just suspect a tinge of that might be involved — and it could be good crazy or bad crazy – when someone invites 70 stray cats into their home.

Van Dusen, 59, is a former family-law attorney who lives alone (not counting the cats) in Oakland, Calif., where she’s a volunteer and foster care provider for an organization called Fix Our Ferals, which traps, neuters and cares for stray and feral cats.

In her 2004 tax return, Van Dusen deducted $12,068 in expenses related to caring for foster cats in her modest home – food, veterinarian bills, cat litter, paper towels, garbage bags, and a portion of her utility bills.

The IRS, as you might guess, said no, declaring the costs she incurred caring for strays as “nondeductible personal expenses,” as opposed to charitable contributions.

Van Dusen — and we’re sure all 70 cats agreed — didn’t think that was right and contested the IRS decision.

In 2009, the case wound up in Tax Court, where Van Dusen represented herself because she couldn’t afford a lawyer.

“If it came down to helping a cat with a medical problem or saving for retirement, I would spend on the cat’s care—as will a lot of rescue workers,” she told the Wall Street Journal, which carried a story Saturday about her victory.

According to the Journal, it was also a victory for animal rescue volunteers across the country, and volunteers in general. There are more than 1.5 million IRS-recognized charities, the article said, and the ruling makes clear that unreimbursed expenses incurred by volunteers working for them are deductible.

Van Dusen learned she had won her case earlier this month. “I was stunned,” she said. “It feels great to have established this precedent.”

She said her pretrial dealings with the IRS were “intimidating.” Once in court, she said, the agency’s lawyers “tried to portray me as a crazy cat lady.” The judge, Richard Morrsion, patiently allowed her to state her case.

“He had to go through all these receipts from Costco and ask questions like, ‘What were these paper towels used for?’ ”

Under his ruling, Van Dusen was allowed to deduct most of some bills and half of others for care of the feral cats. The judge stopped short of granting her total deduction because she didn’t have a valid letter from the charity acknowledging her volunteer work.

The IRS declined to comment on the case. It has 90 days to contest the ruling in  federal appeals court.

(Photo: By Michael Mullady; source: Wall Street Journal)