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Local charity fined for not properly donating raised funds - abc27 WHTM

Dauphin County

Local charity fined for not properly donating raised funds over 5 years

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HERSHEY, Pa. (WHTM) -

Fined for fighting cancer? A local charity for cancer research has been fined for not properly donating raised funds over the past five years. However, the charity president claims there's more to the story.

Lacing-up spikes, grabbing clubs and hitting the green is par for course during the annual Jake Gittlen Memorial Golf Tournament in August. Since 1970 the local charity has raised more than $16 million to benefit cancer research. So when charity president Warren Gittlen heard his foundation was questioned about missed donations – he was stunned.

"For anybody to say Gittlen didn't pay any of the money of the five years is not true," he said. "[Penn State Hershey Medical Center] had the four million up front. Nobody told us how to spend it."

To understand, you have to go back to the beginning. Gittlen said in the late 90's researchers told the foundation more money was raised in a year than what could be spent on research. Gittlen said he would pay the researchers however much they wanted and put the rest into an endowment fund to gain interest.

In 2006, the State Bureau of Charities discovered Gittlen failed to make it clear that some of the money donated during the annual charity golf tournament would go toward an endowment to fund cancer research.

In a 2006 consent decree obtained by abc27, the document revealed Gittlen was fined $5,000 and was required to pay the PSU Hershey Medical Center $4 million within 60 days. He did.

On Monday, hospital spokesman Sean Young confirmed cancer researchers were paid. "We were given $4 million from the [Gittlen Foundation] in a lump sum payment with an understanding that money would be paid over time."

Gittlen said researchers told the foundation they could only use roughly $800,000 a year of that money. The foundation and hospital researchers agreed an amount would be drawn on a yearly basis until the $4 million was gone.

From 2007 to 2011, several 990 tax forms from the foundation show researchers drew $850,000 each year from that $4 million dollar payment. In December 2011, the foundation paid nearly $400,000 from charity donations to cover the balance.

Recently the state once again probed into how Gittlen divvied out the donations. A state spokesman told abc27 the Gittlen Foundation violated the consent decree from 2006. 

Below is the language under "other provisions" in the 2006 consent decree.

"All future solicited by the Tournament for the benefit of the Institute will be paid to the Institute during the fiscal year in which such contributions are received, except for such amount that is reasonably necessary for the continued operation of the Tournament. The Tournament may retain said contributions only if the Tournament clearly represents in its solicitations that it will hold such contributions in trust for the benefit of the Institute (and that upon request, the Institute will be paid in such amounts and within such time frame as requested by the Institute)."

Along with his accountant and attorney, Gittlen said foundation parties are confused on what they violated.

"Why weren't we allowed to do that?" questioned Gittlen. "[The State] told us we had to dump the money there and we did. And [hospital researchers] didn't know what do with it because research doesn't work that way. So [hospital researchers] spent it for each of those five years."

So what happened to the money from 2007 to 2011?

Other than tournament expenses and salaries, all donations were put into a separate charity endowment for cancer research according to Gittlen. He maintained doing so would ensure a better interest rate than what the university hospital could earn, thereby gaining principle for more research.

"There's never been a denial of a request from a researchers who wanted funds to support a project," said Young.

Gittlen said he never pocketed the money like some reports have suggested. He said the goal was and will always be finding a cure for cancer.

"I'm 79 years old," said Gittlen. "I don't know how much longer I'm going to be doing [the foundation]. I'm trying to build up a cushion of at least 10 million dollars so when I pack it in within the next few years and nobody is doing this anymore they can raising money they can keep going on with their research."

According to the 2012 consent decree, the Gittlen Foundation is required to pay the PSU Hershey Medical Center $3.3 million dollars to cover missed donations for the last five years. The foundation was also fined $20,000 for violating the 2006 consent decree as well as no putting proper charity information on solicitation literature. A state spokesman did tell abc27 Gittlen and the foundation did not abuse donations, rather the violation was improper procedure.

Hospital officials say the Gittlen Foundation currently pays for seven full-time cancer researchers. Money raised from the annual golf tournament has helped researchers publish more than 140 medical breakthroughs in cancer research including a treatment for cervical cancer.

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