Many California residents recognize the value in donating to charity. Not only does the donation provide for those less fortunate, but it also can provide the donor with a tax deduction as well as sometimes helping to clear out accumulated items. Prior to making a donation, however, many individuals will research the organization in order to have a better understanding of who it helps and the percentage of the donation that actually goes to those in need. The donor expects that the information provided by the charitable organization is accurate; otherwise, there could be a possible consumer protectionconcern.
In 2015, the California Attorney General filed suit against People’s Choice Charities. This particular charity solicited the donation of vehicles that could be sold with the proceeds then donated to a charity of the donor’s choice. As a part of its advertising, People’s Choice advertised that 100 percent of these proceeds went to the selected charities. However, the consumer protection suit filed against them indicates that approximately 97 percent of these proceeds were used for other expenses such as car repairs and administrative costs.
This lawsuit has now been settled, and the president of the charity has been prohibited from involvement in any other charitable organization. People’s Choice Charities has been ordered to pay $30,000 into a community foundation designed to benefit children. In addition, this charity has been dissolved.
Charitable donations are the heart of many California non-profit organizations. In order to attract donors, many such organizations will advertise that the percentage of donations will go directly to those whom they serve. When this information is not accurate and purposely misleading, it is possible that a consumer protection claim can be filed against the organization.
Source: pasadenanow.com, “Car Donation Charity Agrees to Injunction in Consumer Protection Lawsuit“, June 26, 2017