Running for a cause? Financial questions raised about popular races

Non-profit Team Ortho runs several popular races including the Monster Dash, but where does the money go?

Running for a cause?

MINNEAPOLIS - A Minnesota-based non-profit organization that claims it is "Helping Research One Race at a Time" actually donates only about a penny-and-a-half for every dollar it raises for medical research, according to financial records obtained by KARE 11 News.

Team Ortho Foundation

Team Ortho Foundation sponsors some of the most popular running events in the Twin Cities. Their races include the just-completed "Monster Dash" on Halloween, the "Polar Dash" in January, the "Get Lucky" race in March, and "Women Rock" in August.

Team Ortho also sponsors similar races in Chicago and Dallas-Ft. Worth.

During public address announcements at its races – and in postings on its website – Team Ortho says it supports orthopedic research with donations to Shriners Hospital and other groups involved in orthopedic research.

"We raise money for Orthopedic research," said Team Ortho founder and executive director John Larson. "We make gifts to places like Shriner's Hospital for Children, which is an orthopedic hospital."

But former employees at the Team Ortho Foundation question how much money is actually going to medical research.

On a rainy Halloween morning, an estimated 18,000 people – many in colorful costumes – turned out for "Monster Dash" in St. Paul.

It's one of the biggest running events of the year.

If the runners think much of their entry fees are going to orthopedic research, former employees say they're wrong, and they blame Larson, the driving force behind Team Ortho.

"He was using it like his own personal checkbook and that to me was wrong," said Kean Corkery. He's one of the former Team Ortho employees who told KARE 11 they quit in disgust.

Megan Johnston and Isaac Milkey also told us they walked away after questioning how much money was really going to research.

"We raise so much money throughout the year, and seeing that little or none goes back to charities is – just doesn't sit right," said Milkey.

Trips to China

So, how much race money is going to research? To find out, KARE 11 checked the IRS forms all non-profit organizations have to file.

The most recent report shows that in 2013 Team Ortho brought in $4,362,877. Of that, what went to charities like Shriners Hospital was just $72,700.

A year earlier, it was a similar story. Of $3,599,851 raised, just $36,550 trickled down to charity.

Do the math. The average amount going to charity is just a penny and a half out of every dollar raised.

"That's pretty horrible," said runner Anne Pavel. "Like not expecting that at all."

It surprised other Monster Dash runners, too. Call it more trick than treat.

"Yah, that's not good," said Allie Henning. "That doesn't make me feel good about running."

Eric Sand said that when he and his wife signed up, "They told us – whether we do it or not – the money goes for a good cause."

"I understand the cost behind the race," added Pavel, "but it just kind of makes you wonder who's getting all that extra money."

Reporter A.J. Lagoe put that question to Team Ortho Executive Director John Larson.

Lagoe: "Why such a low percentage?"

Larson: "Oh, because we put it into the races - and the gear - to get people out."

Larson says encouraging people to be active is Team Ortho's primary goal. Doing that by organizing races is expensive, he explained. And so is the custom gear runners get and the medals waiting for each person at the finish line.

Trips to China

But former employees blame some of that cost on mismanagement. For example, they say fancy running gear was sometimes ordered so late that instead of just shipping it, teams of employees had to fly to China to hand carry it back.

"Your sole purpose of being there was to carry items back?" one former employee asked another.

"Yah, just another body. Pack mule," replied Isaac Milkey.

John Larson admits that's happened. "There's times that the only way to get the gear in time for the race is to send people over in order to bring them back," he told us.

But some trips to China to bring back customized Team Ortho outfits sound more like all expense paid vacations.

"We saw the Great Wall, the Forbidden City," Milkey remembers. "We just went around and had a list of things we wanted to see – and we went and did them."

He says he and several other Team Ortho employees spent three days in China doing nothing but sight-seeing before carrying back the merchandise.

"I didn't bring any of my own money at all," he told KARE 11. "So anything we wanted to do was on Team Ortho's dime."

In all, the former employees claim that in recent years, Larson, the executive director, personally took as many as a dozen trips a year overseas in recent years. Some of them are documented with personal photos on his Facebook page.

All of them, former employees say, were paid for with money that could have helped children with orthopedic problems.

When asked about those trips, Larson didn't offer any explanation.

Lagoe: "Going overseas, staying in lavish hotels, all billed to team Ortho. Can you tell us why that's necessary?"

Larson: "I can't comment on that."

Lagoe: "You can't tell us why so many trips?"

Larson: "I can't comment on that."

F rating at BBB

Check with the Better Business Bureau and you'll discover Team Ortho gets an "F" rating because of multiple complaints.

What's more, KARE 11 has learned that Minnesota Attorney General Lori Swanson is looking into Team Ortho after a complaint from former employee Kean Corkery raising concerns about financial irregularities. About Larson Kean wrote, "He seems to be running a 501c3 as if were his own personal checkbook."

Swanson's office recently took action against other non-profits with low donation percentages.

Lagoe: "Have you been contacted by the Attorney General at all recently?"

Larson: "I can't comment."

Lagoe: "You can't say, yes or no, that you've spoken to the Attorney General?

Larson: "I can't comment."

As we began investigating Team Ortho's races and John Larson, the man who runs them, we noticed one other interesting thing.

Larson says he's not handicapped. But KARE 11 watched as he got into and drove away in a Lincoln with a handicapped license plate. It was from Arizona – and it had expired in July, 2014.

Lagoe: "We just got complaints that, you know, here's this guy running a multi-million dollar organization, driving around in a car with handicapped plates that are – have been expired for a year and a half."

Larson: "Yah. Regretfully, I need to change those."

So, if you're just interested in some exercise and some fun, the Team Ortho races are obviously popular.

But if you're concerned about how much of your money is actually going to medical research, check out Team Ortho's financial reports.

And, in this season of giving, the Minnesota Attorney General has recommendations on ways you can check on your favorite charities on their website.

RELATED:Attorney General: Checking on charities

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