State Asks Veterans Fundraising Group to Turn Over Records

State Asks Veterans Fundraising Group to Turn Over Records

CREATED Mar 12, 2010

By Jennifer Kraus
Consumer Investigator

NASHVILLE, Tenn. - The state of Tennessee is moving forward with its own investigation of a group raising money that it says will help veterans.

The state wants answers to questions first raised by NewsChannel 5 Investigates, questions about how the group is raising money and spending it.
NewsChannel 5 Investigates Veterans Fundraiser Group

The state has sent a letter to the national headquarters of the Veterans Support Organization asking them to turn over all of their records regarding their operation here in Tennessee.

And the state isn't the only one taking action after seeing our original story.

The Veterans Support Organization claims to help needy veterans. One of their fundraisers told our undercover teams, "We're collecting donations for our veterans today, needy and homeless veterans."

Another fundraiser told us, "Twenty bucks will help get a homeless or needy veteran off the street."

But our investigation found that the VSO keeps most of what you give to pay for its own expenses and that what VSO fundraisers will say to get donations isn't always true.

Todd Kelley, director of the state Division of Charitable Solicitations and Gaming, said, "I'm very concerned about your report."

Kelley said it's illegal for a charity to misrepresent itself.

In fact, one of the VSO fundraisers told me that he was volunteering to stand out in front of a Mt. Juliet business and ask for donations. He insisted that he was not getting paid.

We later discovered that he received 30 percent of everything he collected.

Todd Kelley added, "Obviously when one of the individuals said he was a volunteer when, in fact, we know they were paid, that's a concern."

When we asked a VSO fundraiser how the donations would help veterans, he told us that the VSO was building a shelter in Madison. "Our shelter will just be for veterans who are homeless," he explained.

And that statement also caught the attention of state regulators because, as it turns out, there is no shelter in the works.

"It's a concern when they misrepresent the fact that there's going to be a homeless shelter that's going to be built with the money they're raising," Kelley told me.

Another concern was how a VSO fundraiser told us donations would be used to help the Fisher House build housing for veterans' families in Murfreesboro. "It's a $2 million dollar project. We're still working on it. It's going to happen. We're going to help fund that."

The fundraiser also specifically mentioned the Fisher House by name even though the Fisher House Foundation had asked the VSO not to.

Now, the national office of the Fisher House Foundation tells NewsChannel 5 Investigates, "We were horrified to find out how they were raising funds." The group goes on to say that it's now completely cutting ties with the VSO and will no longer accept donations from them.

But questions remain about just where your donations are going.

Hank Edney, the chief administrative officer of the Tennessee Chapter of the VSO, told me, "We just had a certified public audit done -- and our current donation rate is at 65%."

But we got a copy of that audit and it says last year, the VSO donated just 16 cents out of every dollar to other programs that assist veterans.

So where did the VSO get the 65 percent figure?

According to the VSO, they count the money they spend on uniforms for their fundraisers, rent, and auto expenses. They also count the money they pay their solicitors, even though some of these men are not veterans.

Todd Kelley from the state's Charitable Solicitations Division said of that practice, "I think that's creative accounting."

Kelley also admitted that he was surprised to see that last year the VSO spent nearly $800,000 to pay the salaries of its fundraisers.

"So almost twice as much money went to the people who were raising the money than actually went to the programs that they say they're supporting," Kelley remarked.

What does he think of that?

"I think if I were giving my money to that organization that would give me great pause," he replied.

Click Here to see the Veteran Support Organization's 2009 audited financial statement.

Another concern of the state is that when the VSO registered to solicit money in Tennessee, the VSO maintained that it did not have an office or chapter here. The group now has both, but has never informed the state that they do.

So how does the VSO explain what its fundraisers told our undercover crews?

The group has now put out a statement saying it uses people with PTSD and other mental health problems as fundraisers and that we should not have relied on the information they were giving out. The state though says charities are responsible for what their employees say.

Click Here to read "Veterans Support Organization Not a Scam," a statement issued by the Veteran Support Organization about its employees' claims.

E-mail: jkraus@newschannel5.com

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