TAMPA, Fla. -- It took 365 days, but the State of Florida has fined the non-profit Veterans Support Organization (VSO) after the 10 News Investigators exposed the group's misleading and illegal practices.
Florida's agency in charge of supervising charities, the Department of Agriculture and Consumer Services (DOACS), cited the VSO for five major violations, including hiring felons to solicit funds, claiming 86 percent of donations went to "programs," and taking advantage of solicitors by not providing benefits, workers comp coverage, or minimum wage.
The VSO has worked with DOACS to come into compliance, but still faces a $2,500 penalty, the maximum the state could fine a non-profit for five violations. The money shouldn't be a problem for the VSO, which brought in more than $8 million last year, mostly in donations from solicitors in malls and in front of retail chains.
The non-profit has also been under investigation by the IRS and other federal agencies and could face additional sanctions for compliance issues.
"The IRS and the State of Florida ... came to us," said Justin Wells, COO for the VSO. "We had open doors and we walked them through it and we got no complaints."
The state's official complaint, filed shortly after 10 News spoke to Wells, seems to indicate otherwise.
VSO still soliciting
There's often little the State of Florida can do when non-profits run afoul with the law, but the VSO has had trouble in other states as well. However, Wells says the group plans on expanding to new states.
And although VSO solicitors are now paid employees of the non-profit, instead of contractors, they are no longer welcome in front of Walmart stores.
A Walmart spokesperson tells 10 News it suspended its relationship with the VSO after questions arose about where donations were going.
Tuesday afternoon, after the DOACS complaint was issued, Wells sent 10 News the following statement via e-mail:
"Today's report from the Department of Ag and Consumer Services offers VSO a positive conclusion and a good turning point to continue our work to get homeless veterans off the street and into the workforce. VSO offered the DACS complete transparency and worked with them on every request. VSO has already addressed all findings presented, including the way we pay our employees, our public marketing materials, and our status and registration."
Wells also addressed the salary of the VSO's CEO Richard Van Houten, up more than $31,000 last year to $286,711. Wells implied it was deserved after the VSO's donations had surged by 50 percent to $8.6 million in 2011.
Where's my donation going?
It can be tough to tell good charities from bad ones since the IRS only reviews 0.5 percent of all U.S. non-profits' tax returns each year. But 10 News has compiled some tips:
- First, find out if the organization currently has non-profit status with the IRS.
- Review the group's Form 990 tax filings for free on FoundationCenter.org or Guidestar.org to learn about its expenses, salaries, fundraising costs, and board of directors.
- Look for red flags, such as high salaries, board members receiving salaries, board of directors or employees related to each other, or high fundraising expenses in relation to revenue.
- Use charity watchdog websites such as:
- The American Institute of Philanthropy
- The Better Business Bureau's Wise Giving Alliance
- The Charity Navigator
- You can also call a non-profit to ask specific questions about how its funds are being spent. Most organizations that aren't religious groups are required to provide their last three 990s upon request.
- UPDATE - For tips on giving to victims of the Newtown, Conn. tragedy, read the BBB's tips.
Find 10 News Investigator Noah Pransky on Facebook or follow his updates on Twitter. Send your story tips to firstname.lastname@example.org.