What booster clubs can do to protect themselves against fundraising scams.
By Danielle Catalano - writer for FundraisingforSports.com.
Sports booster clubs have a variety of reasons for raising funds. Whatever the reason, booster club officials and members should be aware that their clubs and some of their potential donors are at risk for being scammed. Although Texas ranks as the number-one state for having its school districts misrepresented in fundraising schemes, neither size nor climate zone determines which districts are most apt to become targets. It's all about the money.
In late July 2005, Jacksonville, Fla. business owners solicited by Booster Club Publications believed that advertisements they bought from the company were to appear on posters and calendars being sold by the Fernandina Beach High School football booster club. After a few weeks, they found out the booster club was not holding:nor ever had held:such a fundraiser.
In an Aug. 18 interview with First Coast News in Jacksonville, a Booster Club Publications manager acknowledged that the money solicited by the company did not go toward the Fernandina Beach High School football booster club, and that the company had no affiliation with the high school. He said that the business owners assumed the money was going toward their area high school, when instead the money went directly to the company. The manager stated that Booster Club Publications provided donations to high schools across the U.S., but he refused to name which high schools, how much had been donated, or when those donations were made.
Although some business owners gave the company their credit card information and ended up canceling those cards, they were most upset by the fact that money intended to go toward the sports programs went somewhere else, making the student-athletes suffer.
GETTING TO KNOW YOUR LOCAL BUREAU
According to the Better Business Bureau (BBB), such alleged misrepresentations involving booster clubs are not uncommon, and mostly take place around the holidays, when school sports are in full swing and community members are likely to be in the giving mood.
The BBB says that most victims of fraud, scams, and misrepresentations are the elderly and local small businessesprime donors many booster clubs target and depend on to reach their fundraising goals. These groups are targeted because they're most likely to want to improve their communities and, in the case of small businesses, to gain public exposure for their services.
"Most scams follow a pattern, either hitting specific groups, specific regions, or at specific times of the year," explains Ellen Tucker, Public Relations and Special Projects Director for the Upstate New York Better Business Bureau. "Most scams the bureaus deal with are old ones with a new twist, such as check-writing scams."
The Better Business Bureau is a national system that incorporates members from all 50 states and Puerto Rico. All bureaus are membership-based, non-profit reporting agencies that serve their communities' business needs. Their core services include overseeing business reliability reports, resolving disputes, monitoring truth-in-advertising, educating consumers and businesses, and conducting charity reviews. Currently, there are 114 BBBs nationwide.
To make sure student-athletes and high school booster clubs don't become indirect victims of fundraising fraud, the BBB offers advice to booster club officials and athletic directors about how to properlyand legallysolicit donors.
INFORMING YOUR DONORS
According to Tucker, most charities and non-profit groups, including many high school booster clubs, are 501-3C charities that have specific IRS codes. This classification allows donors to claim their monetary gifts as tax-deductible on their 1040 forms. It's also the federal government's way of tracking charities' money exchanges to make sure that they truly do not make profits.
Although athletic booster clubs are not subject to yearly reviews as are other charities, they should follow similar guidelines as other non-profit groups, as well as comply with the rules, guidelines, and policies set by their school districts and administrators.
To avoid confusion and to prevent problems when asking for monetary donations, Tucker advises booster clubs to include specific information when publicizing a fundraising event:
- Who's the main contact person if people have questions or if problems arise, and what is his or her phone number?
- What exactly is the fundraising effort financing?
- When and where is the effort taking place?
- How else may the community help the fundraising cause?
- Who else is affiliated with the booster club?
- Always provide an administrator's contact information, such as the athletic director's phone number and office hours.
Tucker notes the public should be informed about what a booster club may legally do to fundraise, such as hire a telemarketing agency. If the public isn't aware, it's the booster club's responsibility to inform the public. The club should post information regarding when a telemarketing campaign will begin and end and which agency has been chosen by the club to solicit funds. This can be done either on the school's or booster club's Web site or on school-approved flyers and newsletters. The important thing, Tucker notes, is that you don't want to catch donors off-guard.
When it comes to working with professional telemarketing agencies, booster clubs should know that these agencies are obligated by law to call only during business hours and to answer all questions asked by potential donors. If an agency fails to comply, the booster club may be held responsible for false representation. To prevent such incidences from occurring and to maintain a positive reputation, booster clubs must provide the following information to the telemarketing agencies hired:
- The school district's address or the booster club mailing address
- The booster club's or athletic director's phone number
- All payment options, such as check and credit card
- The full name of the booster club thatchecks should be made out to
- The booster club's or school district's IRS tax code
- The profit that the booster club is making from its telemarketing campaign, generally 27-35 percent of the total sales
In Florida and in the South Adams School District in Decatur, Ind., where another alleged telemarketing fundraising scam happened, business owners were told 10 percent of advertising sales would go toward sports booster clubs, and that checks should be made out to the telemarketing agency.
"No professional telemarketing agency will have customers write checks to the agency," Tucker advises. "Checks always go directly to the booster club. That's the red flag. If the telemarketer says to write a check to something or someone besides the club, it's not legit."
USING THE MEDIA
Just as a booster club would use the media to promote an event, the media should be used as a tool to prevent misrepresentations. Whether it's the local paper, a television station, or a booster club Web site, Tucker advises using whichever media outlet is most available to get the word out.
In late August 2005, an alleged fundraising fraud took place in Spokane, Wash., where an individual used official-looking school flyers to solicit donations for Mead High School's winter sports program. After a school employee donated $100 and later found out she was scammed, she contacted police and school officials. The school officials immediately posted the incident on the school Web site and in its electronic newsletter, including a full description of the person whom the employee gave money to.
Similarly, in October 2005 when a high school administrator of the Watertown (N.Y.) City School District heard that the athletic booster club's name was allegedly being used in solicitation speeches by a telemarketing company, he took action. The superintendent contacted all local news agencies and used the district's Web site to inform the public that the athletic department was not associated with the telemarketing company.
ISSUING A COMPLAINT
If a booster club or any of its donors becomes a victim of fraud, a complaint may be filed with the BBB against the alleged misrepresenting company. The BBB serves as mediators between businesses and community members and will investigate alleged wrongdoings on the consumer's behalf. It cannot, however, file charges against a company. It can, though, contact the state's Attorney General's office, which may ask the BBB to investigate the incident.
An individual may file a complaint with the bureau in person or by mail free of charge. If the person calls, he or she will be charged a $4 processing fee. Complaints cannot be anonymous. The bureau fills out the specific paperwork required by law and contacts the company the claim is against.
Member companies have 20 calendar days to respond; non-members have 30 days. Almost all members respond immediately, Tucker says, and non-members respond 68 percent of the time when first contacted.
Businesses tell the BBB what they will do to remedy the complaint. If the bureau finds the company has a justifiable response, it will contact the consumer, who then has the option of accepting or refusing the offer. In most cases, complaints are resolved within 30 days. If the business doesn't respond the second time or, in extreme cases, if the consumer feels wronged, a complaint will be filed with the state's Attorney General or other proper state authority.
In regards to the Jacksonville incident, five business owners filed complaints against Booster Club Publications, all of which were resolved within one month of the filing of the first complaint.
CHECKLIST BEFORE SOLICITING
Tucker advises booster club to be as prepared as possible when it comes to soliciting donations, not only on how to handle donor questions but also how to present the clubs' ideas to their school boards. She suggests booster club officials visit their local BBB's Web site, as well as the national sites (www.bbb.org and www.give.org), to find out which fraud trends may be in the area so administrators and club officials can best inform their communities and prevent misrepresentations. Also, if club officials are considering working with local businesses, officials can find out what the businesses' consumer histories are, such as complaints, positive consumer reviews, and BBB satisfaction ratings.
Overall, Tucker advises booster clubs and school districts to be aware that their primary contributors are top targets for fundraising fraud. Each party involved in the decision-making process of a booster club campaign should take the necessary precautions. Although booster clubs may need money to support their student-athletes, there are some who may want the donations for other purposes.
Note:Athletic Management published a follow-up report on Liberty Publishing, Inc., parent company of Booster Club Publications, in its August/September 2006 issue. To read this article, visit www.momentummedia.com/articles/am/am1805/wucalendarmoney.htm.