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September 13, 2010

Professional Fundraiser Agrees to Conditions for Future Fundraising

(DES MOINES, Iowa) An Arkansas professional fundraising company has agreed that it will follow certain conditions set by Attorney General Tom Miller if it plans to continue soliciting donations from Iowans.

The Heritage Company, based in Sherwood, Arkansas, raises money on behalf of numerous organizations.  According to recorded telephone solicitations obtained through the Attorney General’s undercover consumer phone line, Heritage repeatedly obscured its role as a professional fundraiser, and inflated the percentage of donations that go to charitable organizations it represents.

As part of an agreement called an Assurance of Voluntary Compliance, Heritage is allowed to continue soliciting charitable donations from Iowans, but Heritage agrees that its telephone sales representatives will not make false or misleading representations.  Heritage also agreed that in future telephone solicitations its representatives would:

  • Refrain from stating or implying that they are employees or volunteers of an organization for which they are seeking funds;
  • Clearly state the name of their fundraising company and that the call is a fundraising request;
  • Provide accurate information about the percentage of donations that go to the charitable organization.  Telephone solicitors must also refrain from implying that a donation will provide more of a local benefit than is, in fact, the case.

“Although we caught some troubling solicitation practices on our undercover phone line, Heritage acted responsibly in addressing our concerns,” Miller said.

Heritage agrees to record a sampling of solicitation calls and make the recordings available to the Attorney General upon request.  The company also agrees that financial incentives, including commissions, paid to phone solicitors must be linked to compliance with the agreement and Iowa laws, and not be based solely on the volume of donations generated.

While Heritage denies any wrongdoing or liability, the company agreed to pay the state $15,000.  The company also agrees that violating this agreement is deemed an Iowa Consumer Fraud Act violation, which could trigger a $40,000 civil penalty.

Earlier this year Miller took action against several other professional fundraisers and called on Iowa lawmakers to reconsider a plan, called the Charitable Solicitations Act, which would enable Iowans to find out how much of their charitable donations really go to charity.  Miller points out that there are many reputable charities deserving of Iowans’ dollars.

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