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Fundraising company fined more than $1 million for violating state charity law

Published: Oct. 22, 2014 at 2:51 PM EDT|Updated: Nov. 1, 2014 at 2:52 PM EDT
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COLUMBIA, SC (WIS) - The South Carolina Secretary of State has fined a Minnesota company more than $1 million dollars for violating the state's Solicitation of Charitable Funds Act.

Secretary of State Mark Hammond's office has fined Strategic Fundraising, Inc. of St. Paul, MN $1,054,000.00 for what it says were "numerous violations," including mandatory disclosure and failure to register. The investigation concluded the company's callers did not disclose they were paid or professional solicitors, the location of the charitable organization for which the caller was soliciting and "misrepresentation of the percentage of donations used for charitable programs."

The office claims the violations occurred while employees of Strategic Fundraising, Inc. made calls into South Carolina on June 18, 2014 on behalf of several charitable organizations. Hammond's office released details of the fine Wednesday.

"What makes this case so egregious is that these were robo-calls in which the individual solicitors were using prerecorded scripts," Hammond said. "This wasn't a situation in which an individual caller made a mistake and went off script -- these disclosure violations were a result of deliberate choices made by a professional fundraiser who was well-aware of the requirements of the Solicitation of Charitable Funds Act."

The Solicitation of Charitable Funds Act requires Hammond's office to notify organizations of violations before a fine is levied. Hammond said Strategic Fundraising, Inc. received the notices and in 2009 entered into an agreement with South Carolina to agree to follow the rules of the law.

According to the Notice of Fine attached to this story, the company previously received notices of violations in 2007, 2008 and 2009 and agreed to pay a $6,000 fine and comply with all provisions of the law.

WIS has attempted to contact Strategic Fundraising, Inc. via telephone and email.

In compliance with disclosure rules, Hammond is running for re-election. He is being challenged by Democrat Ginny Deerin.

Residents of South Carolina are encouraged to contact the Secretary of State's office when they receive a call asking for a charitable donation at (803) 734-1790.

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