A Michigan fundraiser that targeted veterans and seniors will be banned from operating in Minnesota and has agreed to pay $200,000 to settle a lawsuit that accused it of engaging in deception and failing to provide required disclosures about what it does.
Minnesota Attorney General Lori Swanson filed suit against Associated Community Services Inc. (ACS) and one of its affiliates in May, the latest legal battle for the organizations, which have been the subject of at least 10 legal settlements with state regulators.
In an agreement approved by a judge on Tuesday, ACS did not admit or deny the allegations. But, along with the payment, it agreed not to act as a professional fundraiser or solicit contributions in Minnesota for two years. It also agreed to record all telephone calls it makes to Minnesota residents afterward for one year and to provide the recordings to the attorney general's office for monitoring.
ACS has not been soliciting in Minnesota since a judge issued an injunction June 28. According to Swanson's office, the Foundation for American Veterans, another Michigan-based charity, paid ACS and its affiliates more than $27 million since 2010 to conduct its fundraising campaign. The foundation spends about 10 percent of its cash donations to help vets, while ACS and its affiliates get about 85 percent of the donations.
Swanson's office accused ACS of sending out false "pledge reminders" and making other deceptive statements to solicit donations for the Foundation for American Veterans, which claimed to assist veterans where the federal and local governments leave off, through veterans' hospitals, homeless programs, educational programs and crisis programs.
The investigation began when the attorney general's office received complaints about high-pressure tactics and deceptive messaging from the company. Typical was one Glencoe, Minn., couple who declined to donate $20 but then got a telephone call a few days later, claiming that they had pledged $20 and asking that they immediately pay over the phone. Pledge reminders started appearing in the mail, along with more calls.
There have been similar complaints in other states, including Oregon, Ohio and South Carolina.
At least 28,000 Minnesotans have donated nearly $930,000 to the Foundation for American Veterans since 2011, according to Swanson's office. More than 35,000 Minnesotans asked ACS to put them on the foundation's do-not-call list. The agreement gives Swanson's office the option to use the money to reimburse Minnesotans who donated through ACS.
Through a spokesman ACS issued a statement on Friday: "We have consistently made every effort to comply with all applicable Minnesota laws and regulations governing the provision of our fundraising services and we welcome state oversight, as it is necessary to hold all fundraisers and nonprofits to the highest standards. Associated Community Services (ACS) has taken steps internally to address any legitimate issues that exist with respect to our services. We take our responsibility to charitable donors and the charities we work with very seriously."