Updated 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 $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.
Although DLE is not one of them, I’m surprised at the number of charities that call me again asking for money after I have written a critical post about them.
I’ve been playing the crooks at DLE for a couple of years now. I vowed $100 and ask them to send me a postage paid envelope to my made-up PO box. A few weeks/months later they call back saying they have not yet received my donation. I ask them to send me another postage-paid envelope. That goes on a few times, then they refuse to send more mailings saying they come back as “no such address” and is costing DLE money. I offer to up my contribution by $25 to cover the costs. They take the bait and it starts all over again. I just LOVE scamming scammers!!
I just looked at DLE’s latest IRS 990 filing, for the year ending September 30, 2018. Most of the $367,000 raised still went to fundraising, and only four dogs were given to law enforcement. That means the cost was more than $90,000 per dog. Also, the Better Business Bureau Wise Giving Alliance, a charitable watchdog, has flunked DLE on nearly half of its 20 good-governance standards, including financial efficiencies. https://bit.ly/3e8HyAE
They called me and initially just wanted to mail me literature about the charity. Of course, I said “yes.” After getting my address she asked what pledge amount I would be most comfortable with. I told her I would make no commitment until I saw the literature and thought the matter over. She said that was fine and that I should stay on the line for some kind of “confirmation” from the supervisor. The supervisor got on the line and tried to get me to confirm a pledge of $50. I repeated my assertion that I would make no pledge at that time. I don’t like being played. Just send me literature and I will decide. My wife and I love dogs and have, in fact, made donations to our police department’s canine program as a memorial to one of our own dogs. But this strong arming leaves me unlikely to contribute to this outfit.
Very interesting stuff. I don’t know what to think as a fundraiser mysel but, i have never really felt good about the 10 percent. I will say I do think it is a small charity and their reliance on a third party might be necessary. Eye opening stuff and great facts, but I question if you’d do this article on say a larger one like United Way or Red Cross where perhaps less money even reaches the hands of those who really need it!
Is DLE registered to solicit in your state? I live in Nevada, and when I was first called, DLE was not registered with the Secretary of State’s Office, which the law requires.
My only phone is a prepaid “throwaway” model. Nine out of ten calls I receive are robocalls, or so I suspect, as I never answer calls from unknown numbers. Most of these display the same area code and prefix as my number, and none of these callers ever leaves a voice mail message. However, last week I was woken by a call from a “Restricted” number. I have a couple of friends with unlisted land line numbers, and was expecting to hear from one of them, so I answered. You guessed it – it was someone claiming to be from “DLE.” However, when I asked questions I only received vague answers, and when I asked how my number was obtained I was told “from a real estate listing.” This was kind of strange, as my number is not linked to my home address, and the person on the other line had no idea even what state I was in! So the above information all makes sense…
Every state has a charitable regulator, usually part of the Attorney General’s office or the Secretary of State’s office, that you can call. A list can be found at this link: http://bit.ly/2Ocz1Qx . In some states, you can query online a database of registered charities.
This “charity” has been hounding me (no pun intended) for 3 months now. During the initial call I told the guy on the phone I wouldn’t donate, but that I would do some research and donate at that time. On the most recent call 2 days ago, I asked to be removed from their call list, which the woman said wasn’t possible, and then she angrily accused me of going back on my word to pledge to the organization. That’s when I knew this was a scam. Thanks for the info above! How do I find if the organization is registered In my state?