'Smile' charity leaders in midst of decade-long feud

Brian Mullaney says he just wants two stubborn Irishmen to bury the hatchet.

Mullaney, who counts himself as one of the two, is co-founder and president of the New York-based Smile Train.

The other is Dr. Bill Magee, co-founder and CEO of the Norfolk-based Operation Smile.

Both multimillion-dollar charities repair cleft lips and palates of children around the globe. Smile Train spent its early years as a project under Operation Smile, but it broke away in 1998 in what Mullaney describes as a messy divorce.

Since then, Smile Train has grown into an organization with more than $100 million in revenue in 2008 - triple what Op Smile reported. While Op Smile says it has helped 140,000 children in 50 countries in 27 years, Smile Train boasts 550,000 children in 78 countries in just a decade.

During the past four years, Mullaney has sent letters to Op Smile with offers of millions of dollars in grants and donations - no strings attached, he says. Earlier this month, he ran an advertisement in the Richmond Times-Dispatch with a letter to Magee:

"Dear Bill Magee, As you know, we've offered Op Smile millions of dollars in donations and grants over the past few years. But you've refused every penny."

The ad goes on to question why Op Smile refuses the help when its own solicitation letters say the charity turns away thousands of children a year because of a lack of money.

So, is Mullaney's latest gesture an act of selfless charity, a crafty marketing ploy, or a personal vendetta?

Magee declined an interview, but the organization sent a five-paragraph explanation saying the two charities use different models, and Operation Smile does not want to be "drawn into an unproductive relationship that can only deter us from our mission."

Mullaney is more than willing to talk, starting with how he hooked up with Operation Smile in the first place.

Mullaney used to own an advertising agency in New York. In 1991, he started a program for public schools that connected poor children who had facial deformities with cosmetic surgeons who were his advertising clients. The surgeons provided their skills for free, while Mullaney raised money for other expenses.

He called the project Operation Smile. Later, though, he saw an article in People magazine about an organization based in Norfolk with the same name. He found out more about the charity and liked what he learned.

In 1994, he merged his organization with the one in Norfolk. He brought along a client, Charles B. Wang, a computer executive whose $10 million gift to Operation Smile in 1998 was the charity's largest to date.

Mullaney said he was profoundly touched and changed by the Operation Smile missions he went on to China and Vietnam. But he also was struck by the number of children the group had to turn away.

"It was heartbreaking," he said.

He thought a better model than flying in volunteer doctors and surgical equipment would be to train doctors and health professionals in the countries to perform the surgeries and to pay them for their work. He started working on such a model while at Operation Smile.

By fall of 1998, when Operation Smile employees were working feverishly on organizing the next year's "World Journey of Hope," an $8.8 million whirlwind mission to treat 5,000 children in 18 countries, Mullaney split from the organization, taking Wang with him. They co-founded the Smile Train in New York the next year.

Smile Train focused on funding operations by doctors in the countries in need, a method Mullaney considers safer, cheaper and more respectful. He also sees it as a way to create self sufficiency so fly-in charities won't be needed.

The organization developed surgery training software, digital medical records, and a system for outside medical experts to assess the operations and track which doctors need more training.

Mullaney concedes, though, that in some countries, such as Somalia and Haiti, the need outstrips the number of surgeons available to do the work.

"I have a newfound respect for what Operation Smile does," Mullaney said.

Operation Smile still flies in medical volunteers from across the globe to countries - 122 missions are listed on the group's 2009 Web site calendar - but the organization also trains physicians and has sites in 25 countries that fund, plan and conduct their own surgeries and clinics. The organization says 68 percent of its work last year was done by those country-based foundations.

That's the piece of Op Smile that Mullaney would like to help, because it aligns best with his model. In a 2007 letter to Magee, Mullaney said Smile Train's fund-raising machine was outpacing its ability to grow programs, which is why he wanted to help fund Op Smile country-based work: "We are not doing this for publicity, to trick you, to embarrass you, to use you, to take over your organization, to steal your volunteers or for any other unsavory motive."

Mullaney sent $25,000 checks to 20 Op Smile foreign foundations in 2006, followed by $50,000 checks the next year. All were turned down.

After the 2006 appeal, Operation Smile's board chairman, Howard Unger, sent letters to those foundations requesting that "the appropriate person write 'VOID' on the check and return it to The Smile Train, declining the partnership offer."

Unger's letters included remarks that were excerpted from a letter Mullaney wrote to an Op Smile corporate sponsor in 2003: "Operation Smile intentionally fabricated tens of thousand of surgeries... distorted its financial reporting... squandered millions of dollars... provided shoddy medical care...."

Those comments echo allegations made in two anonymous e-mails leaked to the media in 1999, which led to a lengthy New York Times article critical of Operation Smile.

The e-mails accused the organization of trying to operate on as many children as possible instead of stressing safety, detailed shoddy record-keeping and lax documentation of expenses, and said that the founders focused too much on their own public images.

The controversy led Operation Smile's board to hire a lawyer to do an independent investigation. He recommended stronger financial and medical oversight, and the organization made changes to address those concerns.

Mullaney said he believes Magee thinks he was behind the anonymous e-mails and The New York Times article. Asked whether he was, Mullaney said he would not respond to a decade-old accusation.

He does say the e-mails changed Operation Smile for the better. And he said that if he had known that statements he made a decade ago would be keeping children from getting surgeries today, "I would have acted differently. I had no idea that more than a decade later Magee would be still angry and that so many children would suffer as a result."

Op Smile Vice President Lisa Jardanhazy wrote in an e-mail: "Since 1999, we have chosen very deliberately not to cast aspersions against Brian Mullaney or Smile Train as we have always maintained that the children should come first. We have consciously avoided being drawn into any kind of war of words and our position on that remains steadfast."

The typical donor might be surprised to find such a standoff between charity groups. After all, both charities are working toward the same end, correcting children's facial deformities, right?

But Laurie Styron, an analyst with the American Institute of Philanthropy, said competition for donor dollars is fierce among charities in this economic climate, particularly among groups that do similar work.

Americans gave an estimated $307 billion to charity in 2008, a 5.7 percent drop from 2007 in inflation-adjusted dollars - in the first decline since 1987, according to Giving USA, a foundation that studies charitable giving.

Styron said that while large organizations often make donations to smaller ones, in an outsourcing type of arrangement, "there's more than what's apparent" in this case because of the rivalry between the two charities.

A watchdog guide put out this month gave Smile Train a B- and Operation Smile a D, based on the percentage spent on program services and fund raising costs. The guide, by the American Institute of Philanthropy, analyzes Internal Revenue Service 990 forms and other charity documentation.

The guide says about 50 percent of what Operation Smile spends goes to program services, compared with 66 to 74 percent of Smile Train's spending. The guide says Operation Smile spends $40 to raise every $100, while Smile Train spends $18 to $24 to raise every $100.

Another international organization that does reconstructive surgery, Interplast, received an A-. That organization, founded 40 years ago, did 6,335 surgeries in fiscal 2008.

The American Institute of Philanthropy has criticized Smile Train for Mullaney's high salary - $190,000, according to the latest 990 report - and its claim that nearly all donations received go to programs and not to operations and overhead. The organization makes the claim because founding members provide funding for overhead and fund raising.

Another charity watcher, Holden Karnofsky, said it can be a mistake to measure a charity's quality by the numbers on its Web site, because the numbers are subject to interpretation, and a clever marketer can spin the numbers.

Karnofsky, who writes a blog called Give Well, has taken Smile Train to task for saying it provides surgery for less money than other missions, while also making direct grants to some cleft palate organizations that use the same model that Smile Train's charts imply are too costly.

In general, Karnofsky said, charities that perform surgeries tend to be appealing to donors, particularly those that have a quick fix, involve children and have striking before-and-after photos. But, he said, these charities often don't have a transparent way of letting the public verify the surgery statistics, assess the rate of complications and see whether there's follow-up treatment. Cleft palate surgeries, for instance, usually require a series of operations.

Both analysts say studies have shown that appeals including photos of sad children are more likely to result in donations, which is why so many organizations use them.

One of Mullaney's most recent advertisements is a good example of that concept. It features a boy with a cleft lip and tears rolling down his face. The bulk of the ad is a letter from Smile Train asking Bill Magee why he won't accept the charity's donations:

"In one of your own fundraising letters, you say that Op Smile turns away 20,000 children a year due to lack of money. That's 20,000 compelling reasons for our two organizations to work together."

Mullaney tried to publish the advertisement in The Virginian-Pilot but was turned down. Publisher Maurice Jones said the ad did not meet the paper's standards for publication.

The Richmond Times-Dispatch published the ad on Dec. 3, and Mullaney said he is considering running it in other publications. He said his reasons are straightforward:

"One, bad blood is stupid, and I'm embarrassed there was so much of it. Two, thousands of kids are being turned away. And three, I'd like Magee to stop waging this war against me."

The two charities seem to have more in common than the deformity they repair.

Both use celebrities for fund raising.

Smile Train has Christie Brinkley, Tom Brokaw and Carly Simon aboard, while Operation Smile counts Jessica Simpson, Cindy McCain and Jackie Chan as ambassadors.

Both support country-based initiatives but still see a need for fly-in missions.

Each has a documentary movie to its name - Operation Smile has "Smile," and Smile Train has "Smile Pinki," which won an Oscar this year.

When Operation Smile posted an item on its Web site about "Smile Pinki" this summer, Mullaney fired off a letter to Magee accusing him of trying to co-opt the film and potential donors. He couldn't resist slipping in a donation as well: "As a gesture of goodwill, I have enclosed a check for $100,000 which is a donation that you can use for payroll in Norfolk."

It was not cashed.

A written statement that Operation Smile sent to The Virginian-Pilot on Dec. 10 said the organization has always welcomed gifts from well-meaning donors but that the two organizations have different operating philosophies and business ethics.

The statement said Op Smile's mission is not just about more money for more surgeries:

"It is about providing the appropriate education and training to increase the available pool of healthcare professionals worldwide. It is about building the necessary infrastructure to sustain the work. It is about establishing trust and mobilizing people who embrace similar values of giving children the chance to smile."

Mullaney, for his part, thinks he shares the same values.

"We see Operation Smile as a good mission," he said. "And we would love to bury the hatchet."

 Elizabeth Simpson, (757) 446-2635, elizabeth.simpson@pilotonline.com