ST. PAUL, Minn. (WCCO) — A major Minnesota charity was hit by a state lawsuit on Monday, claiming it is deceiving donors to its cause.
The Epilepsy Foundation of Minnesota is being sued by Attorney General Lori Swanson for failing to part ways with the professional fundraiser Savers.
According to the suit, the $1 billion Savers thrift store chain isn’t registered in the state, but it is a major source of money for the Epilepsy Foundation.
Clothing donated in parking lot boxes pays the Epilepsy Foundation about 43 cents a pound — a far cry from what the items sell for at Savers chain of 300 thrift stores nationwide.
“Every charity that receives these tax breaks and is a charitable institution in Minnesota has to comply with our laws,” Swanson said.
She claims in the lawsuit that the Epilepsy Foundation of Minnesota has not.
The charity contracts with Savers to generate up to half of its $1.7 million annual operating budget. However, in required state filings the charity answered “no” when it was asked to reveal if it relies on the use of a professional fundraiser.
That, Swanson says, amounts to a failure to disclose to its donors.
“It’s important for donors to know how little of their money here is actually going to the charity,” she said.
Three other state charities that had been using Savers as a funding tool have since cut ties with the Washington-based for-profit company.
A fourth charity, Disabled American Veterans, just got into compliance by agreeing with the attorney general on full disclosure of its funding practices.
When asked why the Epilepsy Foundation won’t do the same, Executive Director Vicki Kopplin could only say, “We have received the lawsuit…we are in the
process of reviewing it.”
Swanson says the lawsuit is based upon a simple premise in state law, adding “it’s about having the information and transparency so people can make their own choices.”
A hearing on the lawsuit against Savers is scheduled for early July.