By Jennifer Mayerle

MINNEAPOLIS (WCCO) — Donations help the Salvation Army serve the less fortunate around the world. But when the charity built a half-million dollar home for local leaders, some staff members started questioning where the money goes.

They asked WCCO-TV’s Jennifer Mayerle to investigate the cost of doing good.

The sight of bell ringers has been associated with the Salvation Army for decades. Dedicated volunteers raising dollars and cents in a red kettle to serve meals, offer shelter and assistance to thousands every year.

But it’s where other donor dollars went that is making noise within the Christian charity. It may come as a surprise to people outside the Salvation Army that the nonprofit provides officers with a home to live in, furniture and a car, plus a minimal salary.

“It is a Christian organization, and their physical needs and their personal needs are not supposed to be that important,” former advisory board member Debbie Beck said.

Beck says officers are supposed to be living modestly. So she was floored when she learned the Lt. Colonels appointed in 2016 to run the Northern Division of Minnesota and North Dakota built a new home.

Lonneal and Patty Richardson left a $365,000 north metro home and the Salvation Army built a new home for them just a few miles away. The cost of the land and home: $544,319.

“Is the public OK with this? I mean, if they’re OK, then I guess I can be OK. But I’m not OK because I don’t think the public would be OK,” Beck said.

The Salvation Army spokesperson told WCCO-TV the original home needed several improvements, and “estimates to correct the decades-old issues” would cost an average of $185,000.

Lt. Colonel Lonneal Richardson responded with a statement that said fewer than 1 percent of Army houses are new builds.

“Because the estimated costs to renovate an existing property would have surpassed the cost of new construction, we felt the purchase was justified, even though it was above our normal pricing structure,” Richardson said. If we mis-stepped in this decision, it was in earnest as we always strive to find the most fiscally responsible, long-term housing solutions.”

Images of the inside of the home from a realtor.com post show what the home looked like. It sold last July for $380,000 and WCCO-TV has learned it was move-in ready with no necessary fixes.

“I think it needs to be explained,” said Daniel Borochoff with Charity Watch.

Borochoff points out issues he sees with the pay structure of Salvation Army officers.

“It’s hard for outsiders to get a grip on whether total compensation package is reasonable because they don’t get only a straight salary, they get their benefits taken care of,” he said.

Borochoff thinks some Salvation Army officers homes conflict with its image of sacrifice and service.

“I’ve heard some cases where it gets out of control and the housing becomes higher than what one might hope. There needs to be a rationale for it if a current house is adequate and less expensive and fulfills the purpose, then they ought to just use the existing [house],” Borochoff said.

Since the Salvation Army is a religious organization, it’s exempt from filing a 990 tax form. That form helps the IRS and the public evaluate a nonprofits operation.

Borochoff gives the Salvation Army high marks in some areas. CharityWatch uses their independent audited financial statements and other factors to rate the non-profit but it cannot be rated among its Top-Rated Charities because it does not meet transparency benchmarks. He wishes it would be more transparent.

“It would increase the integrity of the Salvation Army if they were, you know, disclosing these, the compensation of their top people, as other charities do,” Borochoff said.

WCCO obtained a 2017 resignation letter from a high-level staff member that went to top officials after learning about the home.

The writer said in part, “The Salvation Army is no longer driven first and foremost by doing good in the community, it is an organization driven by dollars and I will not stand behind a Christian organization that preaches mission, but practices greed.”

Beck also received the letter.

“I hope people will start asking questions about where their money is going, and is their money being used in the way they’re being led to believe that it’s being used,” Beck said.

Here is Lt. Col. Lonneal Richardson’s full statement:

As you know, all officer housing in The Salvation Army is purchased by the organization, with the intent to hold the property for multiple decades. Fewer than 1 percent of Army houses are new builds. Because the estimated costs to renovate an existing property would have surpassed the cost of new construction, we felt the purchase was justified, even though it was above our normal pricing structure. If we mis-stepped in this decision, it was in earnest as we always strive to find the most fiscally responsible, long-term housing solutions.

It is important to know that the funds used to purchase this house were not provided by donations to our Red Kettle Campaign or cash donations throughout the year. Those donations go directly to fund programs that serve 144,000 people every year—providing a hot meal for nearly 1,100 each day, and housing for 350 people each night here in the Twin Cities alone. Our responsibility to those who entrust their gifts to us, and those who entrust their lives to our care, is paramount.

Jennifer Mayerle

Comments (8)
  1. You have to factor in the worth of the former home and land too — if it’s sold it may offset the cost of the $500+ new home. What is the worth of the former home and is it paid off?

  2. Gregory Fritz says:

    Liar the house sold as is move in ready

  3. You should investigate Habitat for Humanity. They refuse help for home repairs to the needy. They just refuse to respond with a reason why. Then just ignore qualifying applicants. Kind of a scam.

    1. Kytriya Luebeck says:

      Thank you! They are racist too! I do not support Habitat for Humanity and will never support them! I also quit supporting Goodwill because those in the job training program that is working with the county and Goodwill, are paid by the county! Only those who are the supervisors or hired by Goodwill to be permanent employees are paid by Goodwill. Then, Goodwill hires managers who do not get Mental Illness, over-price things (especially cassette tapes that have multiple tapes in the same package for a book on cassette).

  4. Bill Cenne says:

    They are taking lessons from Goodwill, whose executives are paid obscene salaries. Best bet is don’t donate to these organizations. I the nuns have the exact same thing called Kids Against Hunger, that’s who gets my stuff, some of which is brand new.

  5. Vern McHargue says:

    That advisory board member must have an axe to grind (look deeper). There are exceptions, of course, but I grew up in those homes (called quarters) and most of them are nothing special. We never lived in any one place for longer than three years and never owned any of them. Most officers don’t have financial resources to buy even a modest home when they retire. Many are not paid even closely commensurate to the community benefit they provide. Besides, do you really want the lowest paid people providing service to your community? Do you pick the lowest paid pilot to fly your airplane? Charity leaders deserve more – go pick on the real bad guys!

    P.S. Those homes are assets of the organization. It makes total business sense to own the best quality assets for the financial stability of the organization. They don’t sell/buy homes very often and the home they sold was likely overdue for divesting.

  6. Disappointed with the slanted approach to reporting this situation, lending credibility to a totally unhinged former advisory board member and her self-serving, destructive agenda. I have been on this advisory board for almost 20 years and the army officers are selfless, committed Christian soldiers helping the neediest of the needy, while receiving modest financial support for their ministry. There is no real story here, no evidence of abuse of contributions and no basis for challenging the housing needs of the local leader. It is national enquirer quality enhanced by a disgruntled employee letter and a hostile, egomaniacal former advisory board member. Check your sources better and you will learn about the exceptional work of the Salvation Army.

  7. Janet Johnson Cardinal says:

    I grew up as a Salvation Army officer’s child. We had very little. One year, we were placed in a 2 bedroom house for a family of 5; that’s the house we were assigned, and we had to make due. This story may have been one situation: most SA officers get by with very little and often have no choice for their housing. We were given basic necessities, and the grant they received barely covered food and clothing. So highlighting this one single story does a huge disservice to the SA officers who do sacrifice.