July 1, 2014

New York Attorney General Eric T. Schneiderman announced a $24.6M settlement of his Charities Bureau’s investigation into direct mail fundraising abuses at what has become one of the country’s largest veterans’ charities, the Disabled Veterans National Foundation. The abuses, the investigation found — including misleading solicitations and failure to disclose conflicts of interest — were perpetrated by DVNF’s two outside, for-profit direct mail vendors, Quadriga Art and Convergence Direct Marketing. Under the settlement, Quadriga, which produced and sent out the mailings and played the dominant role in running DVNF’s fundraising efforts, will pay $9.7M in damages, and Convergence, which designed the solicitations and provided other advice, will pay $300,000 in damages. This $10M will go to help support and improve the lives of disabled American veterans. In addition, Quadriga will forgive $13.8M in debt that DVNF owes to Quadriga, and adopt a number of significant reforms to improve transparency and set a higher ethical bar for the direct mail charitable solicitations industry. Quadriga will pay an additional $800,000 to the State of New York for costs and fees. The settlement is believed to represent the largest amount of financial relief ever obtained in the U.S. for deceptive charitable fundraising. NYAG