Dangers in Charitable Giving – Colorado’s Attorney General Takes Action Against Charities

by Kelly Cooper

Normally, when the topic of charitable giving comes up with a client, the discussion is a positive one.  The client is excited about the great work being done by a charity, wants to ensure that their charitable work is continued after their death or has a desire to create a legacy.  However, when representing clients that are fiduciaries who are making distributions for charitable purposes, a danger lurks – donating money to a corrupt or fake charity.

This danger was brought to the forefront last week in Colorado when Attorney General John Suthers filed suit against Boobies Rock! Inc., the Se7ven Group, Say No 2 Cancer and owner Adam Cole Shryock.  In the lawsuit, the Attorney General has claimed that these charities deceived consumers into thinking they were donating money to a cancer-related charity when consumers were actually giving money to a for-profit business that provided only small amounts to charity.  Allegedly, the charities would hire models to take donations on behalf of Boobies Rock! at various venues and events and tell people that their donations would go to other charities fighting breast cancer.  The Complaint filed by the Attorney General also alleges that these charities used the names of other legitimate charities in its fundraising efforts without their consent and that Mr. Shryock used a portion of the funds collected to pay for an online dating service, buy a BMW, pay for his cleaning service, and pay his bar tabs.

This is a harsh example, but is a good reminder to counsel clients to thoroughly investigate any charity they wish to give to and any charitable solicitation they receive.  To read the Complaint filed by the Attorney General, click here.