Thursday, December 15, 2022

New NY Pennies for Charities Report; CVS Accused of Deceptive Fundraising

Pennies_report_2022There are two recent developments relating to charitable solicitations. 

First, the New York Attorney General released the latest iteration of its annual Pennies for Charity Report.  Highlights from the press release announcing the report include:

Despite the pandemic’s continuing economic impact and limitations on in-person events, donations rose to over $1.7 billion in 2021 — an increase of almost $250 million from 2020 and over $400 million from 2019 pre-pandemic contributions. Other report findings include:  

  • In 276 campaigns — 42 percent — charities received less than 50 percent of funds raised, with professional fundraisers retaining the rest. 
  • In 96 campaigns — 15 percent — expenses exceeded revenue and cost charities over $10 million. This is fewer cases than last year for both findings. 

Second, the Boston Globe reports that a lawsuit has been filed against CVS alleging that checkout donations to the American Diabetes Association are actually being used by CVS to reimburse the company for $10 million it already owes to the charity. Here is the complaint, courtesy of the FastCompany website that also covered this story. The plaintiffs filed the lawsuit last May, but it apparently flew below the media radar screen until a recent Tweet highlighted it in the wake of CVS filing a motion to dismiss. CVS strongly rejects the accusation, saying it only agreed to top off the donations if customer donations over a three-year period (2021 to 2023) did not reach $10 milliion. If instead customer donations exceed $10 million, any excess would go the charity.

Lloyd Mayer

https://lawprofessors.typepad.com/nonprofit/2022/12/new-ny-pennies-for-charities-report-cvs-accused-of-deceptive-fundraising.html

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