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On October 1, 2018, Mark Hrywna reports in Nonprofit Times that Food For the Poor Settles With Michigan AG. The settlement calls for FFP to pay the state $300,000 and to revise its fundraising appeals.
Action is based on 2015 financial data. The filed data shows 96.5% of all expenses are categorized as program services, according to the article. The AG asserts that if gifts-in-kind are excluded, program services would be about 67%.
The AG issued a cease and desist order in December 2017. More on that later in this post.
Might want to get a fresh cup of coffee. This will be a long read.
My summary of the numbers mentioned in Attorney General’s Cease and Desist Order:
|| $ total expense
|| $ supporting svc
|| prog %
| per filing
| cash exp.
One particular fundraising pitch is mentioned in the article. FFP conducted a “6 Cents Appeal”, in which it claimed, quoting the article quoting the campaign, that “It only takes 6 cents to provide a meal for a starving child.” The AG took exception to this campaign for multiple reasons. More later in this post.
Article says FFP denies the accusations which leaves us in the typical situation seen in such settlements: While denying the quite serious allegations, the charity will write a $300,000 check from donor funds to pay the state since they did nothing wrong and change their fundraising materials, all of which was actually fine, with both those actions done voluntarily since they didn’t do anything inappropriate.
Dropping the smart alack tone, I really do understand why such comments are absolutely necessary in negotiating a settlement, especially since the California AG still has a separate Cease and Desist Order under appeal. It still rubs me the wrong way, but that’s just me.
Press release from AG
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