To many Americans, the phrase “We support our troops” is more than just a bumper sticker. They put their money where their heart is and contribute to organizations that benefit members of the military – or police officers, first responders, or others who serve. Their generous intent shouldn’t be undermined by sham charities that allocate the lion’s share of donations not to promised services, but to telemarketing, salaries, and other overhead. The FTC and the Attorneys General of Missouri and Florida just announced cases against two outfits that pocketed the proceeds meant to go toward veterans and police officers injured in the line of duty.
Missouri-based Disabled Police and Sheriffs Foundation told donors that contributions would go toward “assist[ing] officers who have been injured, disabled, or paralyzed.” In another solicitation, DPSF claimed, “We also provide . . . relief to families of officers killed in the line of duty. . . . Every day officers bravely go out to protect our streets knowing an officer is killed in the line of duty every other day in our country. They are truly real life heroes.” Appeals like that generated $9.9 million in contributions.
Based in Sarasota, American Veterans Foundation claimed to send “We Care” packages with blankets and snacks to deployed military personnel. They also told donors that contributions would provide “immediate support” to homeless veterans “in desperate need of assistance in the form of food, shelter, clothing, medical supplies and any other reasonable request.” When people who received fundraising calls seemed reluctant to contribute, telemarketers turned to scripts approved by AVF President Paul Monville: “We understand, Mr./Mrs. ____, but I’m sure you’d like to help the Foundation in helping to prevent more homelessness among veterans and brighten the days of our American heroes.” Donors responded by contributing more than $6.5 million.
What was really going on behind the scenes? For starters, neither operation could be termed a “foundation.” According to the Missouri AG and the FTC, the overwhelming majority of donations to DPSF went to paying DPSF Executive Director David Kenik and the professional fundraisers he hired. What about all the promised programs for disabled officers? The complaint alleges that from 2013 through 2016, for every donor dollar DPSF spent, about 94 cents went toward fundraising, management, and general expenses, with a little more than a nickel going to charitable program service expenses.
What about the “We Care” packages AVF said it was sending to service members? Despite taking in over $3.5 million from 2014 to 2016, AVF sent only 306 “We Care” packages during that period at a total coast of just $47,246. The Florida AG and the FTC allege that contributions to AVF jumped substantially from 2015 to 2016, and yet AVF sent packages to only 69 service members in 2015 and 19 the following year. As for “immediate support” for homeless veterans, AVF provided assistance to only a handful of them. Even in its “best” year, just a small fraction of donations went to helping homeless veterans in any way. Where did the millions go? The vast majority of every donation went to for-profit fundraisers, to compensation for AVF President Monville and his son, and to administrative costs.
The settlements in both cases ban the defendants for life from soliciting charitable contributions. The proposed order against the DPSF defendants imposes a monetary judgment of $9.9 million, all but $100,000 of which is suspended based on their inability to pay. The proposed judgment against the AVF defendants includes a financial remedy of $6.5 million, all but $105,000 of which is suspended due to their financial condition. In both cases, the money paid will go to one or more legitimate charities that actually help police officers and veterans, as recommended by the Missouri and Florida AGs and approved by the courts.
Advice for charities. These cases should serve as a reminder that you can’t just turn over the lion’s share of contributions to professional fundraisers and then take your own cut. Monitor what fundraisers are doing on your behalf and live up to the promises you and your telemarketers make to donors about how their contributions will be used.
Advice for fundraisers. For-profit telemarketers must complying with certain provisions of the FTC’s Telemarketing Sales Rule. Under the TSR, for-profit telemarketers must promptly disclose the name of the group making the request and that the purpose of the call is to ask for a donation. The Rule also prohibits them from making false or misleading statements to induce contributions.
Advice for donors. Reputable charities rely on your contributions to help police officers, veterans, and other deserving recipients. But when making a donation personally or on behalf of your business, take time to research the group asking for the donation.
- See what third-party rating sites have to say about the charity. Read reports on sites that specialize in checking out charities. Pay special attention to how much goes for the specific programs you want to support vs. how much goes for fundraising. Visit ftc.gov/charities for tips on supporting the causes you care about and helping to ensure your donations get where they’ll do good.
- Check if the charity or fundraiser is registered with your state charity regulator. If it’s not registered, that alone should set off your skepticism signal.
- What’s in a name? Perhaps a fraud. Just because a charity has “police” or “veteran” in the name is no assurance the group is legit. Some scammers intentionally select names that sound like well-known charities.
- Consider your rights under Do Not Call. Although the National Do Not Call Registry doesn’t apply to charities, certain provisions do apply to third-party telemarketers who place calls on their behalf. If you’re not sure if the call is from the charity itself or from a for-profit telemarketer, ask. If it’s a third-party telemarketer, you have a right to be placed on that firm’s entity-specific Do Not Call list.
- Don’t tarnish your company’s good name by inadvertently associating it with a scam. Your business is often approached to make a donation or to allow fundraising on your premises. Of course, you want to support worthwhile causes in your community, but charity should never be an “impulse purchase.” Read Tips for Retailers: How to Review Charity Requests for a simple form you can use to find out more about the charities who approach your business for help.