Fake charities scam Mississippians

Image: Image: Stock picture of a check

storify.com

via Fake charities scam Mississippians, clarionledger.com

If you donated money to “charities” called Children and Family Services Inc., Mississippi Children Services Inc. or Mississippi Children and Family Services from 2008 to 2012, federal investigators would like to talk to you. The organizations are fake, and according to a Thursday announcement from Mississippi Secretary of State Delbert Hosemann, are part of a far-reaching scam broken up with the October indictment (and recent conviction) of a Florida man.

Hosemann’s office has been cooperating with the U.S. attorney’s north Florida office to investigate the case involving Gary R. Tomey, who  was arrested last fall with an alleged co-conspirator after an investigation found the pair had allegedly “instructed employees to fraudulently tell potential donors living in other states that the employees were volunteers and that all proceeds helped children in the state where the potential donor lived.” Some of those calls went to victims in Mississippi.

“Scams like this will not be tolerated in Mississippi,” Hosemann said.  “I commend the U.S. Attorney’s Office for their work and support in this case.”

In a news release from October, the U.S. attorney’s office stated that the pair “intentionally used a charity name that was similar to a state agency and failed to disclose that their organizations had been previously sanctioned in other states for fraudulent solicitations.” The scheme allegedly reaped more than $1.2 million in proceeds, which went to pay salaries, business expenses and Tomey’s personal expenses. Hosemann noted the organization “fraudulently solicited charitable donations via calls and flyers through his telemarketing company to donors in many states, including the State of Mississippi.”

As part of their continuing investigation, Hosemann said, the U.S. attorney’s office is trying to reach as many potential victims as possible, and if you have donated to any of these organizations, contact Victim/Witness Specialist Gretchen Busbee at the U.S. attorney’s office at 850-444-4000 or email her at Gretchen.Busbee@usdoj.gov.

It’s important to note that, although the names of these organizations are similar to well-known and reputable Mississippi agencies and organizations, don’t be confused. Fake charities often use the names of known organizations to break through our natural defenses of skepticism, and may even misrepresent themselves by using the name of the actual legitimate charity being impersonated.

Before agreeing to donate to any organization over the phone, check it out thoroughly. Ask them to send you more information in the mail before making your decision, and never give your checking account or credit card number to anyone who calls you. (If they won’t agree to send you information, consider it a red flag.) With any telemarketing solicitation, it’s a good idea to keep a notepad nearby, and note the caller ID information, including the number, along with the date and time of the call, the name (if given) of any representatives. If you feel pressured at any time, just hang up. No legitimate charity will pressure, harass, threaten or frighten you; if you feel any of these are occurring, your best ally may be introducing the caller to “Mr. Dial Tone.”

Online obituary donations get a hard look

memorial-candle-400x300

quoguewildliferefuge.org

via Online obituary donations get a hard look, clarionledger.com

PDF: The_Clarion-Ledger_State_20160725_A002_0

If you’re reading an obituary and it contains a request to submit donations to a particular charity in lieu of flowers, it’s a really nice thing to consider. Giving to charity in someone’s name is a wonderful way to honor them, and in supporting causes the deceased person cared about, you are helping further their legacy. But it’s also a good idea to make sure your money goes where the obituary says it will go.

On Tuesday, Vermont Attorney General William Sorrell announced his office had levied a $30,000 fine against Legacy.com and Tributes, which comprise much of the nation’s online obituary business. Sorrell charged the websites had not only failed to register with his office before soliciting donations in Vermont, but that they also had directed donors to a (now defunct) website called Givealike, which then deducted fees from the donation before sending it on to the specified charities.

He also alleged neither the families of the deceased nor the named charities were informed about the scheme, in which Vermonters were charged fees ranging from $10 to $535.50. In some cases, the names and logos of charities were allegedly used without the consent of the charities.

“We are pleased to end this practice, which has cost Vermonters unnecessary fees at a time of vulnerability,” Sorrell noted. “This is a good outcome for Vermont donors and nonprofits alike.”

Under the terms of the settlement, Legacy.com and Tributes agreed not to allow software in the obituary of any Vermonter, or in any obituary where a Vermont nonprofit is listed without disclosing that a third-party’s website will be used and disclosing all fees. They also agreed not to solicit donations on behalf of a nonprofit, or use its trademark, without consent. Further, they agreed to register as paid fundraisers before soliciting Vermonters on behalf of a nonprofit.

This action may have occurred in Vermont, but it highlights a nationwide issue. When someone claims to be raising funds for charity, they often get the benefit of the doubt that the money will go where it’s supposed to go.

Here in Mississippi, charitable fundraisers must register with the secretary of state’s office. If you are planning to include a memorial gift request in your obituary, if you are writing one for someone else or planning to donate to a charity in lieu of flowers, here are a few things you need to consider:

  • Check out the charity. Not only will this help you determine if the charity is a worthwhile steward of donor money, it can help you avoid confusion. “Sound-alike” charities have confused many a donor because their names are similar to well-known organizations.
  • Contact the charity before including them. While charities are unlikely to turn down a monetary donation or to have a problem with including them, it’s important to notify them. Call or email them to let them know you are planning to include the request, and ask for permission and advice. Keep in mind it’s illegal to use their name, logo or other intellectual property in a solicitation without their permission.
  • Include a direct path to the charity. If the charity accepts donations on its own website, include that address (rather than a third-party website). Include a mailing address as well. Even better, just dropping a check in the mail or delivering it in person helps avoid your donation being diluted by fees. (Be sure to include your return address and a description of your gift; it will make it easier for the family to send their thanks.)
  • Be generous. If you can only afford to give a small donation, it will certainly be appreciated. However, “In lieu of” literally means “in place of,” so if you are giving something in place of flowers, the Emily Post Institute advises in a blog post that you try to give at least as much as you would have spent on flowers.

How to check out a nonprofit

Charity money jar

Stock photo

via Moak: How to check out a nonprofit, clarionledger.com

Generosity is a long-established tradition among the American people. Since the earliest days of our republic, Americans have given generously to help our fellow man. And although our system of nonprofits is far from perfect, there’s not a single aspect of our society that hasn’t benefited from the charitable sector. Gifts from donors large and small every day help disaster victims, fight poverty, disease, illiteracy and hunger, help raise standards of living and further political and social causes. And here in Mississippi, we are consistently rated as being among the most generous in giving to charitable causes.

According to the National Center for Charitable Statistics, nearly 1.6 million charities account for more than 5 percent of the nation’s Gross Domestic Product, with donors giving $1.74 trillion. But it’s become apparent in recent decades that there are a lot of folks out there looking to get rich from all that generosity by stealing, lying or swindling. There are also those who squander donated dollars because of poor management, lack of control or oversight, those who might have started out with great intentions, but have since forgotten their original mission, or those whose causes are victims of their organizations’ own successes because they’ve grown too fast.

This year, we’ve seen a spectacular example in the Wounded Warrior Project about which I’ve written a couple of times earlier this year. But those are just the big ones that gets the headlines. For every WWP, there are a hundred smaller organizations that have failed in their stewardship of the precious resources entrusted to them by earnest donors.

So, how do you know whether a charity is worth your time and money? The Internet has given us unprecedented access to resources that can be used to check out a charity. But there’s a gap because many of the organizations on which they report are larger, national charities. For smaller fundraising efforts in local communities, there might not be an organization at all – and zero accountability. In such cases, you have no real way to know whether that $20 bill you dropped in the jar next to the cash register is going to pay bills for that sick child or to fund a gambling trip to Vegas. (I’m not being cynical here; while giving to such causes is a noble and generous effort — and many people consider it an acceptable risk of doing the right thing — the lack of a system of accountability can increase the risk of the money being misspent.)

When considering gifts to organized charities, many experts in the field of nonprofit fiscal accountability advocate an approach that is based on several factors. For instance the BBB Wise Giving Alliance (at www.give.org) urges donors to consider the following four factors. (These are just a summary; the full WGA standards are athttp://go.bbb.org/28Q9IlQ):

1. Governance. Consider the board of directors, if there is one. How often do they meet? (Is it often enough so the directors know what’s going on?) How many are there? (The Wise Giving Alliance suggests five as a minimum number, but it should certainly be more than the founder and a couple of his or her close friends.) Do they get paid? (Very few should be paid by the organization, and especially not the chairman or treasurer.) Do they have a good conflict-of-interest policy? (Such policies should keep board members from participating in or influencing decisions that might benefit themselves or their companies.)

2. Measuring Effectiveness. The Wise Giving Alliance contends the organization should undergo a periodic process to ensure the organization is doing its mission, and to summarize that information in a report at a minimum, every two years.

3. Finances. The Wise Giving Alliance standards require that at least 65 percent of the total expenses should be spent on providing program activities, and no more than 35 percent should be spent on fundraising. The organization should avoid accumulating large stashes of funds, have regular financial audits, and ensure budgets and financial reports are detailed and understandable. Many people assume the higher the percentage spent on programs the better, and that’s certainly a laudable goal. But a charity should also make sure it’s not starving itself of needed infrastructure and resources, just to increase that percentage and look better to potential donors. (See this article on the Nonprofit Starvation Cycle, from Stanford Social Innovation.)

4. Solicitations and Informational Materials. When fundraising and informing the public, the organization should clearly list programs, provide annual reports, take care of donor privacy concerns, clearly disclose how the charity benefits from the sale of products and services and promptly address complaints.

Here are a few (free) resources to help get you started checking out your charity of choice. There are many other options, some of which require you to pay a fee or a “donation” before giving you the information you need:

Secretary of state. All charities soliciting in Mississippi are required to register with the secretary of state’s office. Clicking the link at http://1.usa.gov/28QKPmA will open a search box, in which you can input the name of the charity and get financial information from the charity’s filings.

Give.org. This site is run by the BBB Wise Giving Alliance, mentioned above. It has ratings on many charities soliciting across the nation and maintains the 20 “Standards for Charitable Accountability”.

Charity Navigator. This organization evaluates more than 8,000 charities against three “Dimensions of Intelligent Giving” – Financial Health, Accountability and Transparency and Results Reporting, using information compiled from the organization’s IRS Form 990 tax returns. Results are plotted on a grid, to give you an easy-to-understand visual.

Guidestar. This organization compiles and publishes the IRS Form 990 Tax returns. Basic information (including info supplied by the organization) is available without a login, but you can access the full 990 tax returns with a free sign-up.

Cancer charities shut down

Red heart of the puzzle. 3d illustration

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via Moak: Cancer charities shut down, clarionledger.com, 2/1/16

In the largest charity fraud enforcement action in U.S. history, the Federal Trade Commission joined with all 50 states and the District of Columbia this week to shut down two nationwide “cancer charities.” The announcement came after an investigation of marketing and solicitation practices found evidence of alleged misrepresentation and misallocation of funds. The operators of the scheme were accused of bilking donors of more than $75 million with emotional marketing practices designed to take advantage of donors’ empathy for cancer patients.

As part of the settlement announced Wednesday, Cancer Fund of America Inc. and Cancer Support Services Inc. will be dissolved, and their president, James Reynolds Sr., is banned from profiting from any charity fundraising in the future.

“The FTC and our state enforcement partners have ended a pernicious charity fraud that syphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services the defendants falsely promised,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Today’s settlement, along with those announced earlier, shut down the sham charities once and for all and banned the individual perpetrators for life.”

The operations concluded an investigation into Cancer Fund of America, Cancer Support Services and two other schemes, which were shuttered last May after reaching a settlement agreement with states and regulators.

Reynolds agreed to settle charges in Wednesday’s action. Under the settlement order, CFA and CSS will be permanently dissolved and their assets liquidated. Reynolds is banned from profiting from charity fundraising and nonprofit work, and from serving as a charity’s director or trustee or otherwise managing charitable assets. He is also prohibited from making misrepresentations about goods or services, or violating the FTC’s Telemarketing Sales Rule and state laws.

It’s not often that investigators use the terms “pernicious” and “sham” to describe subjects of an investigation, but since the organizations allegedly took advantage of donors by — for example — using pictures of purported cancer patients and cancer-stricken children, regulators pulled no punches in describing what their investigation found.

“Our office is proud to have shut down these individuals who stole donations meant to benefit people suffering from cancer and used those funds to live luxurious lifestyles and for their own personal gain,” New Mexico Attorney General Hector Balderas said. “Together, the FTC and charity regulators from every state in the country have made it clear — we will not sit idly while scammers defraud consumers and deprive legitimate charities of much needed support.”

As part of the settlement, the companies and Reynolds will have to pay nearly $76 million — the amount the two organizations collected in donations between 2008 and 2012. It’s not known how much — if any — of the settlement money will be returned to donors. For more on the action, visit this USA Today story athttp://www.usatoday.com/story/money/2016/03/30/phony-cancer-charities-bilked-75m-liquidated/82424982/.