Michigan AG Alleges Firefighters Charity Is a Scam
May 20, 2016
Firefighters Support Services (FSS) is “another example of a sympathetic cause – firefighters and those losing their homes from fire – being exploited by scammers,” according to the Michigan Attorney General (OAG). The OAG has filed a Notice of Intended Action and Cease and Desist Order against FSS, accusing the charity of using misleading, deceptive, or false statements in its solicitations. FSS raised almost $4.2 million in funds from December 2013 - January 2016 based on telemarketing scripts that told call recipients that donations would be used to help firefighters get better equipment and help “families that have been burned out of their homes by providing them with food, shelter, and clothing” or “financial support,” according to the OAG. However, FSS was unable to identify for the OAG any grants of food, shelter, or clothing to families burned out of homes, and FSS identified only four grants totaling $5,585 made to individuals for fire loss relief from December 2013 - January 2016, which represents just 0.13% of the $4.2 million in funds raised.
FSS receives an “F” grade from CharityWatch for spending only 10% of its cash budget on programs and having an extremely high $83 cost to raise every $100 in funds. CharityWatch’s rating of FSS factors-out the charity’s reported in-kind (non-cash) valuations related to its program described on its tax form as providing “firefighting equipment and emergency medical blankets to various fire departments.” According to the OAG, FSS has “vastly overstated” the approximately $500,000 per year valuation of its purported blanket donation program by using a per blanket valuation of $20.83 when the blankets donated by FSS were actually purchased at a unit cost of $4.97 by Congress (i.e., taxpayers) for the purpose of shipping them for free to charities that are endorsed to participate in a program to combat homelessness. FSS, not an endorsed participant in the Congressional program, obtains the blankets from the charity World Assist (that is endorsed) and actually pays a third-party middleman for in-kind goods, Charity Services International, thousands of dollars per shipment to send the blankets to various fire stations around the country.
Under the Order filed by the OAG, both FSS and its professional fundraiser, Associated Community Services, Inc. (ACS), are ordered to cease and desist the allegedly misleading, deceptive and false solicitations. The filing also advises FSS of the OAG’s intent to assert civil action seeking, among other remedies, civil fines of up to $10,000 per violation of the Charitable Organizations and Solicitations Act for the more than two million alleged FSS violations.