On November 29, 2010, a preliminary denial of AFCA’s application for renewal of charitable organization license was issued by the State of Maine.
The basis of denial pertains to AFCA’s misrepresentation/deception of information in their application. AFCA’s responded “no” to the question below:
“Has your organization ever been the subject of a revocation, suspension or other disciplinary action taken in this or any other jurisdiction against any occupational or professional license, registration or permit held by the applicant or licensee?”
The president and CEO of AFCA also signed/certified the following statement:
“By my signature, I hereby certify that the information provided on this application is true, factual and accurate to the best of my knowledge and belief. I acknowledge that the Office of Licensing and Registration ………. and that sanctions maybe imposed, including denials, fines, suspension, or revocation of the license, if this information is found to be false.”
Despite AFCA’s certification that the information provided in the application was accurate/factual, data obtained by the state showed that AFCA has a history of disciplinary action and that charges were filed against AFCA by the Pennsylvania Bureau of Charitable Organizations in October 2009. AFCA accepted and signed a Consent Agreement and Order with the State of Maine on July 19, 2010 and admitted its failure to make appropriate disclosures on its application and in conjunction with the application process.
In October 2009, the Commonwealth of Pennsylvania Bureau of Charitable Organizations filed charges against the American Foundation for Children With AIDS, Inc. (AFCA) which concluded in a Consent Agreement which was signed by both parties in July 2010.
The charges filed as well as the Consent Agreement details AFCA's omission of material information in its Form 990 and other filed reports. These errors include AFCA's failure to properly disclose a key employee salary, consultant fees, independent contractor fees as well as fundraising fees and cash/non-cash contributions.
The case was deemed resolved in July 2010 after the Secretary of the Commonwealth of Pennsylvania issued an order adopting the Consent Agreement and after the stipulated fine had been paid.
Year, State Incorporated: 2004, Kansas
Stated Purpose: "to help HIV+/AIDS children, their HIV+ guardians and HIV+ pregnant women in sub-Saharan Africa who have no other access to aid."
Note: According to AFCA, the organization received in-kind contributions in the amount of $5,276,275 which represents pharmaceuticals and medical supplies ($4,851,922) and nutritional support ($424,353).
An organization may change its practices at any time without notice. A copy of this
report has been shared with the organization prior to publication. It is not intended
to recommend or deprecate, and is furnished solely to assist you in exercising your
own judgment. If the report is about a charity and states the charity meets or does
not meet the
Standards for Charity Accountability, it reflects the results of an evaluation
of information and materials provided voluntarily by the charity. The name Better
Business Bureau is a registered service mark of the Council of Better Business Bureaus,
This report is not to be used for fund raising or promotional purposes.
©2012 BBB Wise Giving Alliance
Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.
The organization meets this standard.
Soliciting organizations shall have a board of directors with a minimum of five voting members.
An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.
Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.
No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.
Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.
Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.
Spend at least 65% of its total expenses on program activities.
Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.
Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.
Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.
Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.
Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.
Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.
Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.
Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.
Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.
Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).