If you’re like me, you’ve been impressed with the new SMS (Text messaging) technology being implored during the Haiti relief efforts allowing folks to make donations right from their cell phone.

One of the major organizations to rake in large sums of donations this way, has been Wyclef and his non-profit, Yéle Haiti Foundation.  Since the tragedy roughly a week ago, Yéle Haiti has raked in nearly $2 million from $5/text instant donations. However, as many of you heard late last week, the foundation has come under intense fiscal scrutiny after TSG.com (The Smoking Gun) published past tax returns.

According to TSG, the organization seems to have a “lackluster history of accounting for its finances.”  The site alleges that according to federal tax returns from ’05 to ’07, in addition to other practices the organization paid Wyclef and his business partner around $410,000 for “rent, production services, and Jean’s appearance at a benefit concert.”  According to the tax documents, the non-profit brought in around $1 million in revenue in 2006, and then $1.9 million in 2008.

Here are some of TSG’s major gripes.

Yéle Haiti paid $31,200 in rent to Platinum Sound, a Manhattan recording studio owned by Jean and Jerry Duplessis

The recording studio also was paid $100,000 in 2006 for the “musical performance services of Wyclef Jean at a benefit concert.”

But the largest 2006 payout — a whopping $250,000 — went to Telemax, S.A., a for-profit Haiti company in which Jean and Duplessis were said to “own a controlling interest.”

The major problems with Wyclef’s organization is like so many of us entrepreneurs starting out, the past accounting is far too elementary for an organization that has suddenly begun raking in millions in one week’s time.  The earthquake and Wyclef’s understandable desire to be involved has put them under a microscope.  With the lack of detailed itemization on the returns it leaves many questions left unanswered including why he payed himself six-figures to perform at his own charity’s fundraiser or what the miscelaneous “consultant” services were that cost the company $300,000 between 2005-2007 or what the $225,000 in “promotion and PR” costs were that were doled out in 2006.  Obvious questions that could be asked of a charity of Yéle Haiti’s current stature.

Wyclef responded to the accusations, via a YouTube video on Saturday and then again during a press conference in which he began to cry.  He has asserted that the money in question went toward production for shows that benefited the foundation.

“I never and would ever take money for my personal pocket when it comes to Yele,” he said. “So not only do I denounce all that, I’m disgusted by that.”

So what exactly does Yele do?  Well for the last 12 years the organization has been devoted to providing scholarships, supporting soccer leagues taking Haitian students on educational camping trips.  Additionally they have been involved in past smaller relief efforts following hurricanes. AllHipHop.com recently published some financial facts about the Yele Haiti organization as detailed by the organization’s President, Hugh Locke:

Fact: Yéle Haiti, originally called the Wyclef Jean Foundation, filed a tax return in 2000 and then suspended activities until 2005 and so was not required by law to file a tax return until it resumed operation.

Fact: Yéle Haiti received a clean bill of health in independent external audits conducted in 2005, 2006, 2007 and 2008 by the firm of Tempesta & Farrell, P.C..

Fact: Yéle Haiti was guided by the firm of Grant Thornton LLP to ensure that all transactions involving board members Wyclef Jean and Jerry Duplessis were conducted to fully comply with both the spirit and letter of the law governing such matters.

Fact: Yéle Haiti offices are located in Platinum Sound, the recording studio owned by Wyclef and Jerry Duplessis in order to save money. The organization pays only $2,600 a month for the space and a shared reception service, instead of considerably more for the same arrangement in midtown Manhattan.

Fact: Wyclef Jean was paid $100,000 in connection with a benefit concert in Monte Carlo in 2006, which was organized by a for-profit organization. The vast majority of that amount went towards costs related to the performance, including the hiring of backing musicians and other costs related to the production.

Fact: Yéle Haiti purchased $250,000 of airtime on the commercial television station Telemax in Haiti that is owned by Wyclef and Jerry. We have documentation allocating the hundreds of hours of Yéle programming, over several years, that addressed a wide range of development and social issues in Haiti.

So what do you think? I guess that’s always been the major problem with charity.  Whether its giving the homeless man on the train some pocket change or donating to the Red Cross, you really never know where your money is going.  Integrity is a huge element to maintain for non-for-profit without it, donations and grants are impossible to secure.  How do you feel about Yele given what you’ve learned about the organization?  Are you now concerned about that $5 text message that Hip Hop encouraged you to send?  SOUND OFF!