November 8, 2011
Oregon Takes On a Telemarketer
The Oregon Department of Justice has announced "an agreement that resolves accusations of misconduct against an Oregon-based veterans charity and its for-profit telemarketer." A suit was filed in 2010 against Veterans of Oregon & Members of the Community (VOMC) and Associated Community Services, Ind. (ACS), a telemarketer. The suit involved alleged violations of Oregon's no-call law and misleading statements about how contributions would be used.
Among other things, the DOJ suit alleged that VOMC, through their fundraiser, ACS, raised hundreds of thousands of dollars from Oregonians by soliciting donations over the phone "telling donors that contributions would be used to help homeless veterans or veterans with medical needs." Instead, 80% of the fundraising money went to ACS, and only a minimal amount of the remaining 20% went to veterans. The majority of the money VOMC received was used to pay travel expenses of the Director, John Neuman, and other members of VOMC as they traveled around Oregon awarding honorary medals to veterans.
Under the agreement the former director of VOMC cannot serve as a director for two years, and the board agrees to procedures that will insure that donations are spent for actual charitable purposes. The board must obtain proposals from at least three telemarketing firms before agreeing to a contract with a telemarketer. VOMC must not permit the telemarketer to use donor information for commercial purposes, and the board must review all scripts and written materials provided to donors. ACS paid $40,000 and agreed to refrain from soliciting donations in Oregon on behalf of any nonprofit client until December 31, 2013. If ACS acts as a fundraiser in Oregon after that date, it must register with the Attorney General and show that it will comply with the law. ACS must disclose its status as a professional fundraiser.
The announcement by the Attorney General states, "It is extremely important that charities be properly managed, that they do not deceive donors and that the telemarketers they hire follow the law."
Thanks to Samantha Benton who provided information about this action by the Attorney General as part of my Nonprofits Organizations class.
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