On average, people donate more than $2.5 billion each year to over 40,000 American charities with military-related missions. While most of these charities are trustworthy, others prey on Americans’ patriotism and generosity. Late last month, the Federal Trade Commission announced Operation Donate with Honor, a nationwide law enforcement and education initiative aimed at stopping veteran-related charity fraud.
Here in Washington, Attorney General Bob Ferguson brought civil enforcement claims against two charities as a part of the Operation Donate with Honor initiative. The AG’s respective complaints allege that the charities violated Washington’s Consumer Protection Act and the Charitable Solicitations Act by donating little to no money to their advertised causes and using deceptive practices to draw in donations.
One charity sells dozens of memorial bracelets, military decals, hats and shirts on their website. Each item is supposed to display a fallen soldier’s name, thus memorializing their service. The AG’s suit claims that the nonprofit has neither given money to any of its 40 stated beneficiaries nor provided any of its promised services—including scholarships to the children of fallen service members, service dogs to veterans with PTSD, and other support.
Per the complaint, it allegedly displays an A+ rating from something called the Business Bureau of America, which doesn’t seem to exist. In fact, the charity has an F rating from the Better Business Bureau.
Another charity sued by the state allegedly promised to use donations to help veterans receive medical treatment that the Department of Veterans Affairs does not provide. Yet it’s accused of spending less than 1% of over $2.5 million in revenues earned in each of the past two years on direct services to wounded veterans.
It raises money by selling decals and t-shirts and by conducting concerning sweepstakes promotions that encourage donations by implying that recipients will get more than $10,000 in prize money upon sending back a form. That form in turn includes a donation request. Despite sending out hundreds of thousands of these letters annually, only two recipients actually won the full prize.
A Reminder for Consumers:
If the AG’s claims are true, then these charities have deceived consumers over years without consequence. No cause is above potential fraud. Charities—and entities posing as charities—are often less scrutinized by people who want to give to a worthy cause. Deceptive charities often operate undetected and can continue doing so under altered identities. Fake accreditations and questionable promotions represent two of many ways a person or organization can try to establish trust and exploit good intentions.
Remember to research before you donate in order to ensure that your money is going to a legitimate cause. Some tips if you’re considering a donation in Washington include:
- Asking for detailed information about the organization, including an address, phone number and name
- Asking the organization what percentage of donations benefit the actual cause
- Checking whether the charity is registered with the Washington Secretary of State
For a more extensive breakdown of what to look for before you donate, or of what to do if you are suspicious of charity fraud visit this helpful page from the FTC.