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February 24, 2015

Minnesota Professional Fundraiser Agrees to Reform Telephone Solicitation Practices

Strategic Fundraising Inc. solicitation to undercover phone line leads to company changes, $10,000 payment for consumer protection enforcement

(DES MOINES, Iowa) A St. Paul professional fundraiser will increase transparency and better inform would-be Iowa donors who receive telephone solicitations, through an agreement with Attorney General Tom Miller.

The agreement, called an Assurance of Voluntary Compliance, settles a dispute over Strategic Fundraising Inc.’s telephone fundraising disclosure practices.

In May of 2014 a Strategic Fundraising representative called a Consumer Protection Division undercover phone line to solicit a charitable donation.  The telemarketer did not identify his status as a professional fundraiser.

When the recipient of the call asked how much of a donation goes to the charitable mission, the telemarketer responded that 84% of funds received by the charity would go to the cause. 

But the claimed 84% is the proportion of all funds raised that go toward the underlying mission.  The Strategic Fundraising telemarketer did not further explain that the company's fees could be as high as 90 to 100 percent of the proceeds of the specific telephone fundraising campaign that generated the call to the Iowan.

While Strategic Fundraising denies any wrongdoing or liability, the company agreed to change its solicitations by requiring its solicitors to state the company’s name at the beginning of each call, and by promptly identifying the company as a professional fundraiser.  The agreement also requires company solicitors to provide specific responses when asked where donated funds go, to reflect the costs of the telephone campaign and the fundraiser’s share of the proceeds.

Strategic Fundraising further agreed to pay $10,000 for Iowa consumer protection enforcement, and to make a refund upon request to any Iowan who donated in response to a solicitation from Strategic Fundraising at any time after January 1, 2012.

“Solicitors are supposed to give Iowans complete and accurate information not only about a charity’s efforts, but also the charitable fundraising efforts on behalf of that charity,” Miller said.  “Iowans are entitled to know how much of each dollar is going where they intend it to go,” Miller said.

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