Schuette: Deceptive Charity to Cease Operations after Misleading Donors
LANSING – Michigan Attorney General Bill Schuette today announced a settlement over claims against a charity known as Firefighters Support Services (FFS) of Wyandotte, Michigan. The group used deceptive phone calls to fundraise claiming that funds went to help firefighters and victims of fire but more than 90% went elsewhere. As part of the settlement FFS will dissolve their operations within 60 days.
Additionally as part of the settlement, Firefighters Support Services’ three directors have agreed to pay $144,000 over the next three years, and its directors have agreed to never again serve as directors or officers for a charitable entity. Three-quarters of the settlement amount will benefit the Southeast Michigan Chapter of the American Red Cross for the purpose of home fire relief. The remaining one-quarter will pay for the cost of the investigation.
“Michigan residents are very generous, but the unfortunate reality is that we all must be cautious of those that would exploit that generosity,” said Schuette. “The directors and officers of charities have a responsibility to the public to ensure that their organization’s solicitations are truthful. Today’s settlement protects the public by ensuring that the operators of this charity cannot deceive residents any longer. Donors should also remember to protect themselves by researching charities before donating.”
Where the Donations Went
During the period of these solicitations, Firefighters Support Services raised $4.2 million from donors throughout the nation, yet more than 90% of the charity’s expenditures went to fundraising costs, salaries and administrative costs, or to programs that were not disclosed in Firefighters Support Services’ solicitations.
Firefighters Support Services used a blanket donation program to exaggerate the extent of its charitable programs and its efficacy as a charity. Firefighters Support Services achieved this by obtaining donated blankets that were themselves purchased by Congress, i.e., the taxpayer, and intended to combat homelessness. Firefighters Support Services then included inflated values for the blankets on its public financial statements.
In May, Schuette issued a Notice of Intended Action alleging that Firefighters Support Services was using a deceptive and misleading solicitation script and had filed deceptive financial statements with Schuette’s office.
In the filing, Schuette alleged that Firefighters Support Services’ solicitations deceived call recipients by informing them that Firefighters Support Services helps firefighters get better equipment and helps “families that have been burned out of their homes by providing them with food, shelter, and clothing” or “financial support.”
The organization was unable to identify any grants of food, shelter, or clothing to families that have been burned out of their homes. Firefighters Support Services was able to identify three grants of money totaling $5,586.06 to individuals for the purpose of fire loss relief. Despite being a prominent part of its solicitations, these grants represented just one-tenth of one percent of the $4.2 million raised during this period.
How to Avoid Scam Charities
Schuette once again reminded donors that some telemarketers, such as Southfield-based Associated Community Services in the present case, keep 85% or more of each donation. Schuette encouraged donors to research their own charities and to give directly to the charity. For more information on professional fundraising costs, see the Attorney General’s 2015 Professional Fundraising Charitable Solicitation Report.