Over the last eight years, New Jersey-based Civic Development, its parent group CDG Management and related companies have collected more than $291 million for charity, police and fire causes nationwide, and kept all but $49 million, according to state reports.
CDG has used 28 names since 1992 to solicit money, but all the firms are tied back to the same for-profit company in New Jersey, according to the Federal Trade Commission.
CDG has been repeatedly accused of false and deceptive fund-raising. It is operating under special conditions imposed by state regulators in South Carolina, Pennsylvania, Oklahoma, Idaho and New Jersey. It has run afoul of regulators in at least 18 states and the FTC in the last 15 years, paying more than $1 million in fines.
Company officials declined to be interviewed and referred all questions to their attorney. Copilevitz said that "virtually every organization that raises money for public safety groups has been the subject of regulatory scrutiny at one time or another."
"CDG has been able to resolve its regulatory problems in a positive manner, which has made the company bigger, stronger and more effective."
CDG, based in an office park in northern New Jersey, employs about 5,500 solicitors in 35 call centers in 11 states across the eastern half of the country.
Some CDG contracts guarantee nonprofit clients as much as $400,000 a year. Others guarantee a percentage of all funds raised -- 10% to 20% to the client with the rest going to CDG.
CDG's expense filings in Georgia and Florida, where more detailed records were available, report 40% of the total money raised paid for the telemarketer's employees' salaries. Almost 20% more went to phone charges and mail processing.
Despite warnings from regulators -- trade commission attorneys said in 1997 that the CDG played "on people's law enforcement sympathies for profit" -- the firm and its affiliates still represent most of the nation's state fraternal orders of police.
The Organization of Police and Sheriffs was among a dozen California nonprofits -- half of them police-related -- that have used CDG and related companies to solicit millions of dollars over the phone in recent years. Of $5.8 million collected from 1999 to 2001, the groups received $939,000, state records show.
The groups that hire CDG see it as a win-win deal. Even if CDG keeps the bulk of the money it raises, the police still end up with more money than they would have gotten otherwise.
