Attorney General Ellison secures agreement to strengthen governance and oversight practices of Minnesota veterans charity
Charity was the victim of insider misuse and governance violations
March 17, 2022 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today announced that his office has reached a settlement agreement with Department of Minnesota Veterans of Foreign Wars Charitable Association related to past misuse of charitable assets and governance violations by an Association insider.
“Minnesotans are generous people who just want to know that their charitable donations are being used for the causes they care about. Part of my job of helping all Minnesotans afford their lives and live with dignity, safety, and respect is ensuring that charitable assets are protected and used for their intended purpose,” Attorney General Ellison said. “My office’s Charities Division launched this investigation because cases of charity misuse anywhere tarnish the reputation of hardworking and important charities everywhere. Let this be a reminder for all Minnesota charities: proper governance and oversight are the chief responsibilities of nonprofit directors, and they should always have a watchful eye over their people, operations, and assets. While our first priority is to protect the public and charitable assets, my office is also here as a partner to help educate them about their responsibilities.”
A former Association director and treasurer misused Association assets by writing checks to himself from the Association’s bank account or making payments directly to his creditors or financial institutions from the Association’s funds. The Association voluntarily complied with a Charities Division investigation in revealing that while that misuse was discovered after an internal audit and was separately prosecuted, the Association ultimately booked a loss of nearly $40,000 due to the incident.
Under the terms of an Assurance of Discontinuance filed in Ramsey County District Court, the Association will conduct a review of its governing documents, policies, and procedures and create those necessary to address any deficiencies and protect the Association’s assets. The Association will also be required to adopt written conflict of interest, whistleblower, and document retention and destruction policies, as well as maintain and strictly comply with internal control financial management practices developed in consultation with appropriate professional advisors. Association directors and officers will also be required to undergo training on their duties as nonprofit insiders.
The Minnesota Attorney General’s Office makes available several publications and pamphlets that provide information about charitable organizations, charitable trusts, professional fundraisers, and nonprofit organizations generally:
- “A Guide to Minnesota’s Charities Laws” discusses key laws including the Minnesota Nonprofit Corporation Act, the Charitable Solicitation Act, and the Supervision of Charitable Trusts and Trustees Act, among other laws that require certain organizations to register with and provide notice to the Minnesota Attorney General’s Office.
- “Guide for Board Members” covers fiduciary duties of directors of nonprofit corporations and is meant to assist board members with the important responsibilities they assume when elected to a charity’s board of directors.
- “Nonprofit Organization Resources” contains a listing of resources covering charitable solicitation, professional fundraiser, and charitable trust registration, government agency contacts, and training and technical assistance providers.
You may submit complaints about similar situations using an online complaint form on the Attorney General’s website at www.ag.state.mn.us/Office/Complaint.asp. For additional information, you may also contact the Attorney General’s Office, as follows:
Office of Minnesota Attorney General Keith Ellison
445 Minnesota Street, Suite 600
St. Paul, MN 55101
(651) 296-3353 (Twin Cities Calling Area)
(800) 657-3787 (Outside the Twin Cities)
(800) 627-3529 (Minnesota Relay)
