St. Louis, Mo., Feb. 22, 2011 – Consumers should be cautious about donating money to seven charities that have used the same company in St. Louis County to help them run strikingly similar fundraising sweepstakes across the U.S., the St. Louis Better Business Bureau (BBB) warns. The charities are based outside Missouri, but receive donations at the same Kirkwood, Mo., post office.
Donors in California and Wisconsin have told the BBB they believe the sweepstakes letters, prepared with the help of the fundraising consultant Precision Performance Marketing of Ballwin and Kirkwood, are misleading. They say the mailings make it seem they already had won cash prizes or were on the brink of winning. The BBB said Internal Revenue Service annual 990 reports show that several of the charities have spent a high percentage of their contributions on fundraising.
Michelle L. Corey, BBB president and CEO, said the IRS reports raise serious concerns about the effectiveness of the charities.
“We feel it is critical for donors to know just how much of their contributions are going for a charity’s programs and how much is going for overhead expenses like fundraising costs and officials’ salaries and benefits,” Corey said. “When most of a charity’s income is used to pay fundraising costs, consumers have to ask whether that charity is the best place for their money.”
The charities with ties to Precision Performance Marketing are:
- National Cancer Assistance Foundation of Sarasota, Fla., which operates the programs Breast Cancer Assistance Fund, Children’s Cancer Assistance Fund and Children’s Cancer Dream Network.
- Autism Spectrum Disorder Foundation of Schereville, Ind.
- Disabled Police Officers Counseling Center of Niceville, Fla.
- Child Crisis Network of Pompano Beach, Fla.
- Children With Hairloss of South Rockwood, Mich., which operates Children’s Sunshine Network.
- Circle of Friends for American Veterans of Falls Church, Va.
- Child Watch of North America of Orlando, Fla.
All of the charities signed contracts with Precision Performance Marketing.
Five years ago, Precision Performance Marketing was at the center of a controversy that led to the resignation of David J. Lovell, founder and president of the Kirkwood charity Reach Our Children. Board members of Reach Our Children said at that time that Lovell never told them that his wife was a co-owner of Precision Performance Marketing, which had been paid $3 million to assist Reach Our Children with fundraising from 2003 to 2005.
Missouri secretary of state records show that Michael R. Confalone of Ballwin has been president of Precision Performance Marketing since its formation in 2003. Until recently, David Lovell’s wife, Nancy, was vice president. In April 2010, David Lovell replaced his wife in that position.
Jim Judge, director of the BBB's Charity Information Service, said IRS records for several of the charities tied to Precision Performance Marketing indicate only a small amount of past contributions have gone to programs the charities were set up to help.
- Disabled Police Officers Counseling Center reported total contributions of $562,000 in its 2008 IRS 990 report, the most cent available. Of that, $478,000 went to pay fundraising expenses. The charity said about $66,000 of that total went to its charitable programs, or about 12 percent. Of that, about $14,800 went to counseling, less than 3 cents of every dollar contributed.
- National Cancer Assistance Foundation reported contributions of about $405,000 in 2009, with $367,000 of that total going to pay independent contractors. The charity reported that $44,000 went to program services, or about 11 cents of each dollar donated.
- Autism Spectrum Disorder Foundation reported contributions of about $1.2 million in 2009, with nearly $1.1 million of that raised through Infocision, a telemarketing company, and Precision Performance Marketing. Of the approximately $877,000 raised by Infocision, nothing went to the charity. Of the $203,000 raised through Precision Performance Marketing, about $38,000, or 19 cents of each dollar, went to the charity. The total for both contracts was about 3½ cents for each dollar raised.
In recent weeks, an 84-year-old woman in Dana Point, Calif., received sweepstakes solicitation letters from each of the charities. The letters offered cash prizes ranging from $6,184 to $7,414, but said she could win only by returning the forms.
A Nov. 16 sweepstakes mailing from the Autism Spectrum Disorder Foundation reads: “OFFICIAL DOCUMENT. EXPRESS NOTICE FOR CASH AWARD.” The woman’s name is typed into the space marked, “Recipient’s Name” and “Six Thousand Nine Hundred Twenty Six Dollars” is typed into the space marked “Cash Award.” The letter continues: “I ASSURE YOU I WILL PERSONALLY WRITE YOU A CHECK FOR $6,926 if you send your form in and follow the official rules.” The letter asks for a donation, but notes that no donation is required to win. The reverse side includes information about autism.
The solicitations from the other six charities are similar and the rules at the bottom of each entry are nearly identical. Each asks that the entry form and donations be returned to a post office box at 343 S. Kirkwood Road in Kirkwood. The post office is the same one formerly used by Lovell’s Reach Our Children at the time Precision Performance Marketing was operating a sweepstakes for that charity.
Records with the Illinois attorney general show that Precision Performance Marketing has signed three-year contracts for fundraising consulting with six of the charities. Under the agreements, Precision Performance Marketing is prohibited from soliciting on behalf of the charities, “or ever have custody or control of any proceeds contributed” to the charities. Laws in several other states also bar fundraising consultants such as Precision Performance Marketing from having custody or control of contributions.
One of those contracts is with Circle of Friends for American Veterans. The charity’s president, Maj. Brian Hampton, told the BBB that Precision Performance Marketing’s law firm in Kansas City assured him that the contract was legal, but he said, “I don’t like it.” Asked how much his charity was receiving from the contract, he said, “It’s not good. I’m just not comfortable with it. I think I’m going to have a ‘come to Jesus’ meeting with my board (about the contract).”
In addition to the three-year contracts with the six charities, Precision Performance Marketing was hired on a month-to-month basis as a consultant for Child Watch of North America, according to its president, Don Wood. Wood said Precision Performance Marketing charges 41 cents for each sweepstakes piece mailed. He said the company is responsible for mailing between 25,000 and 30,000 pieces a month, 12 times a year.
On its website, www.precision123.com, Precision Performance Marketing describes its sweepstakes fundraising program as “designed to elicit not only the greatest number of donor responses, but generate the most donations possible. The messages vary in approach, but all involve a sweepstakes giveaway.”
Lovell founded Reach Our Children in 1994 and grew it into a $5 million-a-year national charity before his resignation in March 2006. In 2005, the BBB warned about donating to Reach Our Children, citing potentially misleading sweepstakes offers.
A woman from Racine, Wis., told the BBB she felt misled by several of the recent sweepstakes mailings, including solicitations from Children With Hairloss, Children’s Cancer Dream Network and Autism Spectrum Disorder Foundation. She said she made several small donations to the charities and was inundated with more mailings.
Of the seven charities, National Cancer Assistance Foundation appears to be the most recently created. Paul DeBonis is president of the charity. Children’s Cancer Dream Network, a program of DeBonis’ charity, has the identical name of a program used by Lovell’s old Reach Our Children charity.
A website lists DeBonis as chief operating officer of a Florida company called Living Naturally. A brief biography on that site says he was former chief financial officer and chief operating officer of Full Circle Solutions in St. Louis. Missouri records show that Full Circle Solutions has used the Ballwin address at 474 Mark Wesley Lane that is now used by Precision Performance Marketing. In 2004, Full Circle Solutions also was using the same Kirkwood address – 12166 Old Big Bend, Suite 100 – used by Lovell’s Reach Our Children and its Children’s Cancer Dream Network. The Old Big Bend address also is used by Precision Performance Marketing.
Despite e-mails and phone calls to the seven charities, only Wood, Hampton and DeBonis responded to requests for information from the St. Louis BBB. (Children With Hairloss did respond to the BBB’s Wise Giving Alliance which evaluates national charities. That charity did not meet seven the alliance’s 20 Standards for Charity Accountability).
DeBonis initially said his cancer charity got involved with Precision Performance Marketing on the recommendation of an associate in the charity arena. He referred other questions to Precision Performance Marketing.
In a later e-mail, DeBonis said his charity has been pleased with the work of Precision Performance Marketing. He also said, “We don’t have the time or resources to address local Better Business Bureau inquiries.” Officials with Precision Performance Marketing did not respond to a request for information.
The BBB offers the following tips to consumers solicited by charities:
- Read any charity sweepstakes offers carefully. Do not be misled by mailings indicating you have already won or are a contest finalist. This may simply mean the winner is chosen from those who receive solicitations or who respond to mailings.
- U.S. Postal statutes do not allow a sweepstakes to require consideration (such as a donation) in order to participate. Donors and non-donors should have the same chance of winning.
- Learn all you can about a charity before contributing. Ask for written information on how much of your contribution will be spent on program services and how much will be spent on fundraising, management and other expenses.
- In some cases, direct mail and telemarketing can be expensive. If you have concerns about the expense of a charity’s campaign, consider donating directly to the charity.
- Check with the BBB for a Reliability Report by going to www.bbb.org or calling 314-645-3300. For a charity to receive BBB accreditation it must meet 20 Standards of Accountability covering everything from governance to fundraising.
Contacts: Michelle Corey, President & CEO, 314-645-3300, firstname.lastname@example.org, or Bill Smith, Trade Practice Investigator, 314-645-3300,email@example.com