Schuette Files Cease and Desist Against Breast Cancer Charity Who Claimed to Raise Money for Research Grants
LANSING - Michigan Attorney General Bill Schuette today announced a Notice of Intended Action and Cease and Desist Order against Breast Cancer Outreach Foundation, Inc., a Florida nonprofit corporation, for violating the Charitable Organizations and Solicitations Act. Violations included false solicitation and diversion of funds raised to other purposes. The foundation has been in operation since July 2014.
In 2015, Breast Cancer Outreach Foundation (BCOF) raised $1,425,201, including $36,372 from the 2,003 paid pledges from Michigan residents. The organization solicited via both telephone and direct mail. The Foundation raised this money by telling donors that funds raised would be used for breast cancer research grants in support of a breast cancer vaccine. However, Breast Cancer Outreach Foundation did not use the funds raised for breast cancer research. During 2015, they made no grants, whether for breast cancer research or for any other purpose. (For the year prior, BCOF’s grants were de minimis: two grants totaling $1,212.) Instead, Breast Cancer Outreach Foundation used the money raised to pay its professional fundraisers ($1.3 million) and to pay its President’s salary ($75k).
“I won’t tolerate deceptive fundraising. If a charity tells you it’s raising money for a specific purpose, it must use the money raised for that purpose,” said Schuette. “Donors should also be on guard against these deceptive practices. Remember: research the charity before you give."
The Attorney General’s investigation into Breast Cancer Outreach Foundation stemmed from the department's 2016 investigation into professional fundraiser Corporations for Character, which resulted in a monetary settlement and a four-year ban on soliciting in Michigan. Breast Cancer Outreach Foundation used Corporations for Character for some of its fundraising, a fact which led the Attorney General to scrutinize the charity’s own fundraising practices.
The Notice of Intended Action alleges 14,542 violations, with maximum penalties of $10,000 per violation. It also orders Breast Cancer Outreach Foundation to cease and desist these violations and gives the Foundation twenty-one days to resolve the matter or face a civil action in court. Concurrent with the Notice of Intended Action, the Attorney General is also issuing Breast Cancer Outreach Foundation a Notice of Intent to Deny its charitable solicitations registration.
Breast Cancer Outreach Foundation’s President, Neil G. Paulson, Sr., is also the President of another charitable organization, Help the Vets, Inc., that solicits in Michigan. The two charities resemble each other in their shared executive (Neil G. Paulson, Sr.), large gift-in-kind programs accounting for the bulk of the charities’ activities, and deep reliance on expensive professional fundraisers. The Attorney General is also issuing a Notice of Intent to Deny registration to Help the Vets, Inc.
To assist individuals in making wise decisions regarding which charitable donations to support, Schuette established an online searchable database for charities. The Attorney General also publishes an annual professional fundraising charitable solicitation report. Through these resources, users have access to information to aid them in determining which charities are worth supporting—and which are not. The Attorney General's Charitable Trust Section is also available at (517) 373-1152 to answer inquiries about a charity.