“Boiler Room” Nonprofit Fundraising Crackdown in Florida | SBDC UNF

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“Boiler Room” Nonprofit Fundraising Crackdown in Florida

This has been a nationwide problem as long as I can remember. Sometimes a nonprofit organization (usually an association) doesn’t bother with creating relationships that are meaningful for long term fundraising. Instead the go for fast money. They hire a “boiler room” fundraising agency to make calls to local citizens posing as nonprofit employees. The fund raising call center keeps most of the money donated over the phone. The contracting nonprofit takes what is left as found money as there was no effort on their part. I remember a PBA drive in New Jersey in the early 1990’s. The callers were soliciting to send deserving kids to an “ice show”. It turned out to be two skaters on a piece of plastic that was 20 feet by 20 feet. Let the donor beware!

Here is the article as presented by the South Florida Business Journal.

Florida has joined a nationwide crackdown on fraudulent charitable solicitors who claim to help police, firefighters and veterans.

The effort, dubbed Operation False Charity and announced on Wednesday, was led by the Federal Trade Commission, along with 61 attorneys generals, secretaries of state and other law enforcement agencies.

The actions were filed against 32 fundraising companies, 31 individuals and 22 nonprofits or purported nonprofits on whose behalf donations were solicited, according to the Florida attorney general’s office.

“These defendants allegedly tricked consumers into giving by claiming affiliations with law enforcement and veterans groups or misleading consumers about how much of the money donated would actually go to those groups,” according to a news release.

As part of the operation, Attorney General Bill McCollum said Florida and numerous other states have filed a lawsuit against Community Support Inc., which solicits donations on behalf of more than 35 charitable clients, but allegedly kept more than 80 percent of donor money.

In addition to misrepresentation, the organization is alleged to have harassed callers, falsely claimed to be law enforcement or veterans, or falsely claimed a person had previously made a pledge when they had not.

Community Support has agreed to stop all improper or illegal conduct, and a settlement is imminent.

The company also will have to regularly report information to the states and be more responsible for its employees’ training, conduct and representations made to consumers. Community Support also agreed to reimburse the states $200,000 for the costs of the investigation.

Consumers are urged before donating to:

  • Recognize that the words “veterans” or “military families” in an organization’s name don’t necessarily mean that veterans or the families of active-duty personnel will benefit from the donation.
  • Check an organization before donating. Some phony charities use names, seals and logos that look or sound like those of respected, legitimate organizations.
  • Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.
  • Do not send or give cash donations. For security and tax record purposes, it is best to pay by a check made payable to the charity. Ask for a receipt showing the amount of your contribution.

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