A charity fundraising pitch in Las Vegas for the dogs

Dogs for Law EnforcementUpdated on June 18, 2018.   See end of post

The recent telephone caller to the New To Las Vegas world headquarters said his name was Sam. He was cold-calling on behalf of Dogs for Law Enforcement. Sam described this as a national charitable organization based in the Houston area providing police agencies with trained dogs that cost $20,000 to $50,000 each. The agencies, Sam said, get the pooches “at no cost to the taxpayer.” He asked for a pledge that he said would be tax-deductible.

I sniffed the air. A tax-deductible contribution would cost taxpayers somewhere the value of any tax savings I might get, even if not where the dogs were furnished.

I sniffed the air again. Since Sam volunteered nothing, I asked him directly how much of the donations received actually went to the stated mission of providing and training dogs.

There was a pause. Ten percent, he replied.

So that meant 90% of cash gifts went for fundraising and other stuff rather than dogs, I suggested. Sam had a reply I didn’t understand.

But with for-profit middlemen getting such a rake-off, I knew by then the essence of what I needed to know. After Sam and I ended our conversation, I did some more sniffing around. It’s actually worse than I thought, including the fact that DLE never has been registered to solicit in Nevada. That makes very illegal the pitch to me on behalf of, ironically, dogs helping the law.

According to its latest IRS Form 990 tax filing (which you can download by clicking here), for the fiscal year ending September 30, 2017, DLE received $477,000 in contributions. But as I read the return, of that sum, only $42,000 was spent in furtherance of the charitable mission (i.e. dogs). That’s only 9% of the money donated or spent (the DLE was pretty much a break-even operation), even less than what Sam told me, although not materially so. The watchdog Better Business Bureau Wise Giving Alliance says the charitable commitment ratio–the cut of total expenses paid in direct furtherance of the charitable mission–should be a minimum of 65%.

Even that $42,000 didn’t cover very much, according to the tax return: donation of just three dogs, grants to defray training of six canine teams “in Iowa and the Houston area,” and $21,000 for “canine grant supplies and maintenance.” Perhaps the dogs or their handlers ate well. But giving Sam the fundraiser the benefit of the doubt, dividing $42,000 by three dogs is only $14,000 per dog, considerably less than the $20,000-to-$50,000 cost he quoted me as the true cost of K-9 provisioning. Yet the amount donated to the charity was a whopping $159,000 per dog (the $477,000 divided by three dogs).

DLE President Pamela Smith, who kindly answered my emailed request for comment, apologized for what Sam the fundraiser told me about dog costs. She said the $20,000-to-$50,000 quote I was given was for one category of canine, service dogs used for therapy or PTSD situations. The “average cost” for all dogs, including training, was $12,000 to $16,000, she wrote, in line with my calculation. Smith said DLE has furnished 12 dogs since its founding in 2013.

But why so little going to the mission? Again according to the tax return, another $19,000 was spent on overhead like IT and accounting. But a whopping $408,000 went right out the door to the paid telemarketer, Charitable Resources Group LLC (Sam’s employer), also of Houston. That helped produce a fundraising efficiency ratio–the percent of received contributions remaining after deducting fundraising costs–of just 14%. The BBB says 65% is the acceptable minimum here, too.

Smith said DLE over the years has worked with three different phone solicitors, all of which took roughly the same cut. “Unfortunately, at this time, we do not have many other options when it comes to fundraising,” she said, noting that the fundraisers cut is not paid on donations made directly to DLE through its website. Smith also said no one at the charity, including officers, is paid.

When DLE was formed in 2013 and submitted an IRS Form 1023 requesting that contributions be tax-deductible, it included (under penalty of perjury) a proposed budget. The plan projected contributions received of $390,000 and fundraising expense of just $2,000. That would be an extraordinarily high fundraising efficiency of 99%. As I noted above, the latest fundraising efficiency was 14%. I specifically asked Smith about this in my request for comment, but she did not address it in her reply. Fortunately for DLE, the IRS does virtually no follow-up.

Although Nevada is extremely weak when it comes to charitable regulation, state law does require most charities that aren’t religious or academic institutions to be registered with the Nevada Secretary of State’s Office before commencing solicitation. DLE never has been listed on the Secretary of State’s website as being registered for solicitation, which I confirmed by calling the main office in Carson City.

Smith acknowledged that DLE is not registered in Nevada and should be prior to soliciting. She blamed this omission on a 2015 change in Nevada law, an outside vendor dropping the ball and the fact that different states have different laws, requirements and filing fees that are all hard to keep up with. (Earlier this year, DLE ran into a minor paperwork issue in Mississippi that briefly resulted in a cease-and-desist order against it by the Mississippi Secretary of State’s Office). Smith said DLE is in the process of registering in Nevada and has “ordered our phone solicitor to stop calling [in Nevada] until the proper documentation has been filed.” Nevada law actually requires no less.

You don’t have be a police dog to sniff out stuff.

UPDATE ON JUNE 18, 2018: More than a week after Sam the fundraiser called me in Las Vegas soliciting a contribution for Dogs for Law Enforcement, the nonprofit today became registered for the first time with the Nevada Secretary of State’s Office, according to this online record. DLE also filed its Nevada Charitable Solicitation Registration Statement. That finally makes it legal for DLE to solicit contributions in Nevada. But the filings won’t tell you that DLE furnished only three dogs for the $477,000 it generated in nationwide donations last year. A Nevada law requires the Secretary of State’s Office to post on its website a full financial statement or an IRS Form 990s, which does have this information, but the agency simply ignores the mandate.  

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