TOPEKA – (August 1, 2019) – A Tennessee-based sham hospice charity will be dissolved and three of its officers will be permanently banned from any charity or fundraising activities following a legal settlement with Kansas and other states, Attorney General Derek Schmidt announced today.
As a result of today’s settlement agreement, negotiated by Schmidt and seven other state attorneys general, the New Hope Foundation, Inc., and its president Farrah Young will also pay $160,000 to the states, including $10,556.98 to reimburse Kansas for investigation costs and for civil penalties.
The states alleged that New Hope raised funds through telemarketing and direct mail for the purpose of providing education about hospice services. It sent “local area appeals,” which appeared to the donor to be a solicitation from or for the benefit of a local hospice but was not. New Hope’s “charitable programming” primarily consisted of its fundraiser sending out information regarding the benefits of hospice care when requested, information on its website and canned public service announcements.
In 2016, the organization had gross receipts of $4,243,069, but performed little, if any, program services. In addition to paying executive compensation of almost $100,000 and minimal other administrative expenses, the remainder of the money went to pay fundraisers to solicit donations on behalf of New Hope. The organization was indebted to the fundraisers more than half a million dollars.
“There are many charitable organizations that provide important services,” Schmidt said. “Unfortunately, we frequently see scammers take advantage of the good will and generosity of Kansans and others around the country by setting up fake charities to scam generous donors out of money that they think is going to a good cause.”
Last month, Schmidt’s office announced the conclusion of an almost decade-long nationwide investigation, lawsuit, and multistate action settlement that shut down four affiliated sham cancer charities. As part of that settlement, the charities’ assets were liquidated and $2.5 million is being provided to help legitimate cancer centers across the country.
Schmidt urged Kansans to do their homework when donating to charities. Scam artists often use names similar to those of well-known charities and popular charitable causes in efforts to sound legitimate. Schmidt’s office offered the following tips to keep in mind when making charitable contributions:
- Ask for written information, including how much of the money raised is actually used for charitable purposes and how much will end up in the hands of the professional fundraiser.
- Be careful with telemarketers requesting contributions. Often the telemarketer keeps a substantial portion of the donation.
- Do not be pressured into making a contribution or pledge.
- Do not feel obligated to send a donation to charities that send token gifts such as key chains, greeting cards, mailing labels, etc.
- Make certain the charitable organization actually serves the need it claims to serve.
- Ask for financial statements of the organization to determine who will benefit from the donations.
- Make a personal giving plan and support well established charities on your terms, not in response to marketing solicitations.
More information on staying safe from scams is available on the attorney general’s consumer protection website at www.InYourCornerKansas.org.
A copy of today’s settlement agreement can be found at https://bit.ly/2YBjo91.