Attorney General Swanson Permanently Bans Veterans Charity from Soliciting in Minnesota for Engaging in Deceptive Practices
released on July 28, 2017
found in newsletter: June & July 2017
Attorney General Lori Swanson recently settled with a Michigan-based veterans charity, Foundation for American Veterans, Inc. (“FAV”), over concerns that it used deceptive practices to solicit donations in Minnesota, as well as improperly manipulated its financial records to make it appear that its charitable programs were more significant than was actually the case. The settlement permanently bans FAV—and its board members and officers—from soliciting contributions in Minnesota. FAV is also subject to a $200,000 civil penalty if it violates the settlement.
After receiving an influx of complaints from Minnesotans about high-pressure and deceptive solicitation tactics, the Attorney General’s investigation of FAV revealed that it knew of, approved, and benefited from misrepresentations being made to potential donors. These misleading solicitations included telling potential donors that they had pledged to make donations to FAV when they had not, and failing to disclose to potential donors that a for-profit professional fundraiser was making solicitation calls on its behalf.
The investigation also revealed that FAV had significantly inflated the portion of its revenue that it claimed to spend on its charitable mission. FAV did so by taking credit on its financial filings for distributing to charitable beneficiaries non-monetary, or “gift-in-kind,” donations that it never actually saw or possessed. FAV also improperly inflated the value of these gift-in-kind contributions, which made it appear to the public that it was more efficient with their donations than was actually the case. In fact, more than 80% of each dollar donated to FAV was kept by its for-profit professional fundraiser.
More information and tips on recognizing and avoiding questionable charities can be found in the Attorney General’s Office publication called Giving To Charities—Know the Facts, Avoid the Scams, and Other Tips on Charitable Giving. In the meantime, if you have any questions about the settlement, you may contact Assistant Attorney General Carol Washington of the Minnesota Attorney General’s Office at (651) 757-1298 or 1-800-657-3787.
The settlement is related to a lawsuit the Attorney General’s Office previously filed against FAV’s telemarketer, Associated Community Services (“ACS”), which was resolved after ACS agreed to a two-year ban on telemarketing in Minnesota and to pay a $200,000 civil penalty to the Attorney General’s Office. See State, by its Attorney General, Lori Swanson v. Associated Community Services, Inc., Court File No. 27-CV-16-7913 (4th Jud. Dist).
Original Press Release