Michigan AG Calls Out Nonprofit in Firefighter Charity Scam

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AG-Schuette

By Joe Ross from Lansing, Michigan (2011 Michigan Gubernatorial Inauguration 154 N) [CC BY-SA 2.0], via Wikimedia Commons

May 18, 2016; MLive

On Tuesday, Michigan’s attorney general, Bill Schuette, filed a Notice of Intended Action and Cease and Desist Order to Firefighter Support Services of Wyandotte, a Nevada-based corporation operating as a nonprofit, and to Associated Community Services of Southfield, a for-profit telemarketer. Together, he said, the pair added up to a multimillion-dollar charity scam.

Nonprofit Firefighters Support Services of Wyandotte’s website says it was founded by retired firefighters and paramedics a decade ago. John Carre is listed on its 990 as its president, and the group shows an income of nearly $2 million per year in 2013 and 2014. Among its claims:

  • That it provided more than $620,000 in fiscal year 2013-2014 to fire departments and victims of fire across the country;
  • That it sent 45 children on scholarships to camps for burn victims across the United States; and
  • In late 2012, it provided a donation of over $90,000 worth of emergency equipment to assist the NYFD.

But Schuette’s office, which looked only at two years, says:

During the period of these solicitations, Firefighters Support Services has raised $4.2 million from donors throughout the nation, yet was unable to identify any grants of food, shelter, or clothing to families that have been burned out of their homes. […] Firefighters Support Services was able to identify three grants totaling $5,586 to individuals—not families—for the purpose of fire loss relief. These grants represent a tenth of one percent of the $4.2 million raised during this period.

Schuette’s office also notes that the charity lists a $500,000-per-year blanket donation effort for the homeless and fire victims, but “the value of the program, which is based on a valuation of $20.83 per blanket, is vastly overstated,” Schuette said. “In fact, the blankets were purchased by Congress, i.e., by taxpayers, for $4.97 per blanket with the purpose of combating homelessness. The per-blanket cost even includes free shipping to charities around the country that have been endorsed to participate.”

Firefighters Support Services isn’t certified to participate in that program, says Schuette’s office. Instead, FSS received the blankets from World Assist, a nonprofit that is certified. FSS then invests “several thousand dollars” per shipment to ferry the overvalued goods along to a third organization, Charity Services International, which purportedly finally distributes the five-dollar blankets to fire stations and charities.

This practice is known as “daisy-chaining” and is meant to create a perception that a charity has a bigger program-related budget than it actually does. This makes their ratios look better to donors.

“This is another example of a sympathetic cause—firefighters and those losing their homes from fire—being exploited by scammers,” Schuette said. “The best defense against such scams is to do your homework or donate to a known charity. You don’t know who’s on the other end of the call or whether you can trust them.”

NPQ readers may remember that we have done a good deal of coverage on scams masquerading as first-responder charities.—Ruth McCambridge