Some area stores may want to ramp up their process for screening charitable groups they allow to solicit donations on their property.
Because the Tonganoxie-based Purple Heart Veterans Foundation could produce documentation showing it was an IRS-approved, tax-exempt nonprofit organization, two local stores — Dillons and Walmart — let the group solicit donations in front of their businesses. Shortly thereafter, a series of Journal-World articles highlighted questionable aspects of the nonprofit, including the founder’s felony theft conviction and numerous financial irregularities.
Clearly, just having legal nonprofit status doesn’t guarantee a group isn’t engaged in shady practices.
That point was further highlighted by a recent call from an Olathe man, reporting that the same group of people who had solicited for the Purple Heart Veterans Foundation at the Olathe Walmart, were back at the store, but with new banners. This time, the solicitors were collecting for Patriot Outreach, an Oregon-based nonprofit that advocates for veterans with post-traumatic stress disorder.
The solicitors had been hired by a Topeka-based fundraising company run by Scott Hayes, who declined comment for our stories. When the Purple Heart Veterans Foundation was sued for trademark infringement and its director said he planned to dissolve the nonprofit, Hayes called up Patriot Outreach and offered quite a deal: free money. All Patriot Outreach had to do was let Hayes use its name when soliciting and Hayes would kick back 40 to 50 percent of the money to the group.
“Forty to 50 percent is better than nothing,” said Col. Antonio Monaco, Patriot Outreach founder. After some tax form checking, Monaco’s group seemed to be on the level, and they have no paid staff. Hayes doesn’t appear to be doing anything illegal, and there are no regulations for how much of a cut fundraisers can take. For a small nonprofit, Hayes’ offer was a sweet deal.
However, the 50 to 60 cents on the dollar Hayes’ group keeps is far higher than nonprofit industry standards of 10 to 20 percent. Would donors still give to a solicitor if they knew most of the money was going to Hayes and not Patriot Outreach?
One nonprofit analyst we spoke to referred to the type of fundraising Hayes does as “trick-or-treating for money.”
Stores that allow nonprofit solicitors on their property can stop people like Hayes in their tracks by being more cautious when choosing groups that will be allowed to solicit donations. The Journal-World questioned Walmart and Dillons about allowing the Purple Heart Veterans Foundation in front of their stores, but even when store representatives were told that one of the people operating the charity spent time in prison for theft, representatives from the stores wouldn’t say they would ban the group.
Businesses owe it to their customers to go beyond a basic IRS check when determining whether to allow a group to solicit. A better choice for any store would be to simply select well-established, well-known local charities with a proven track record in their communities.