Nonprofit Newswire | Minn. Sues Calif. Nonprofit

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March 24, 2010; Mercury News | Doesn’t it make your blood boil when hustlers scam behind the facades of nonprofits? It is all too common in the educational field. The Minnesota Attorney General just filed suit against a California nonprofit that was pitching college entrance prep software under the false guise of charity—pledging that the sales would go to fund scholarships for poor kids.

The AG says that the nonprofit, the Dream Scholars Foundation, based in San Diego, told parents that it was affiliated with their children’s schools and that their kids had requested the $165 software package (one of its scams was to offer parents a 30-day free trial of the software, but then immediately charge the parents without their permission $55).

According to the AG, the nonprofit Dream Scholars Foundation isn’t a registered nonprofit, isn’t registered to solicit charitable contributions in Minnesota, hasn’t awarded any scholarships directly to students, and has made only $23,000 total in charitable contributions—to whom?—since it was founded in 2008 (as of November 2009). That’s in comparison to its revenues during that period, totaling $1.575 million, according to the AG’s press release.

Looks like there was a lot of potential scholarship money that didn’t get distributed as scholarships or charitable contributions. Congratulations to AG Lori Swanson for going after this California-based “alleged” charity scam. But where’s the California AG on this? —Rick Cohen