On March 28, 2019, the Federal Trade Commission (FTC) along with the Attorneys General in Florida and Missouri announced settlements with two charities that were accused of distributing misleading appeals.

The Federal Trade Commission and the Missouri Attorney General announced a settlement (U.S. District Court for Eastern District of Missouri, Case No. 4:19-cv-00667) that bans the Disabled Police and Sheriffs Foundation (DPSF) and its Founder and Executive Director, David Kenik, from soliciting charitable contributions. The announcement indicated that the reason for doing so, in part, was for “falsely claiming that consumers’ donations would be used to help police officers and families of slain officers, providing life-saving equipment to law enforcement agencies, and provide advanced, specialized training for law enforcement officers and departments.” The FTC announcement states that from the years 2013-2016, the average spending reported by DPSF showed that of every $100 spent, only $5.41 actually went to program services. DPSF’s conduct is reported to have violated sections of the Federal Trade Commission Act, the Telemarketing Sales Rule, and the Missouri Merchandising Practices Act. A monetary judgment of $9.9 million has been imposed, with all but $100,000 of this amount suspended due to an inability to pay. According to the FTC’s press release: “The money paid will go to one or more legitimate charities that actually assist disabled police and sheriffs, as recommended by the state of Missouri and approved by the U.S. District Court for the Eastern District of Missouri.”

In addition, the FTC and the Florida Attorney General announced a settlement (U.S. District Court for the Middle District of Florida, Tampa Division, Case No. 8:19-cv-744-T-33TGW) that bans the American Veterans Foundation and its President, Paul K. Monville, from soliciting charitable contributions. The announcement indicated that the reason for doing so, in part, was for “deceptively claiming the consumers’ donations would be used for specific charitable purposes, including care packages for deployed service members, immediate assistance to veterans facing homelessness, and counseling.” According to AVF’s 2017 IRS Form 990, the organization raised $2,766,198 in revenue, with all but $1,033 of those monies being in the form of contributions, gifts, and grants. The organization’s expenses for the same year totaled $2,704,152, with $2,295,573 (85%) spent on fundraising expenses, $209,096 (8%) spent on administrative expenses, and $199,483 (7%) spent on program expenses, which amounts to 7 cents for every dollar raised. AVF’s conduct is reported to have violated sections of the Federal Trade Commission Act, the Telemarketing Sales Rule, the Florida Deceptive and Unfair Trade Practices Act, and Florida’s Solicitation of Contributions Act. A monetary judgment of $6,584,282 has been imposed, with all but $105,000 being suspended. According to the settlement, “This sum will be paid to a Nonprofit Organization as a Charitable Contribution. . . following subsequent motion by the Florida Attorney General and order of this Court.”

In previous years, the public asked the BBB Wise Giving Alliance about both of these charities. As a result, BBB WGA sent multiple written requests for information but the organizations did not provide any of the materials. The following are links to the BBB WGA reports on these groups: Disabled Police and Sheriffs Foundation, American Veterans Foundation. 

One similar element of both of the above government actions is that they involved charities engaged in telemarketing as the principal fundraising method. In both instances, the fundraising contracts with the charity involved 80 percent or more of the collected funds going to the telemarketers. As noted above, misleading statements were made by the solicitors. Telemarketing can help charities raise money but, in the wrong hands, it also can be a tool to commit fraud. For additional tips on telephone appeals, see the following link.

Video of the Week

As part of our Building Trust Video Series, we are pleased to provide a video featuring Cyndi Zagieboylo, President and CEO, of the National Multiple Sclerosis Society (a BBB Accredited Charity ) which funds research into the causes, treatments, and a cure of MS. The organization also provides education and support to people with MS, their families and caregivers; provides education and training for healthcare professionals who treat people living with MS; and provides direct financial assistance to people living with multiple sclerosis. 

Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• America’s Charities
• Huntington's Disease Society of America
• Military Spouse Corporate Career Network

Finally, remember to let us know by going to give.org/charity-inquiry if you are  interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance