Posted on February 13, 2001

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Mail-Order Grant Scams on the Rise

Dozens of foundations across the country have been inundated by requests for cash from individuals desperate for money, the New York Times reports. While the requests vary, they all have one thing in common: the individuals making the requests all bought a list of foundations from one of a growing number of mail-order businesses that promise easy money to those willing to fork over a modest "finder's fee."

The Community Foundation of Greater Chattanooga recently found itself party to such a scam when it was deluged with letters from individuals seeking money for home repairs, medical expenses, and other domestic emergencies.

"We’re just a small foundation serving Chattanooga, and the only individual grants we make are for college scholarships," said foundation president Pete Cooper. "But I've got a stack of letters you wouldn't believe from people all over, pouring out their hard-luck stories."

According to the Times, the companies behind the scams attract customers through the mail, newspapers, or the Internet and sell their lists for fees ranging from $19.95 to $49.95. Typically, they falsely advertise to unwitting individuals that grants are easy to secure and that many foundations are happy to give out money as long as it is for something legal.

"Scams promising government grants were the hot thing 10 or 15 years ago, but now it seems to be foundation grants," said Tracy Thorleifson, who tracks the issue at the Federal Trade Commission's offices in Seattle. "What makes this particular scam so egregious is that it preys on the hope of desperate people. Letter after letter says, ‘We’re about to lose our house,’ ‘You’re our last hope,’ ‘My child has been hospitalized,’ ‘My husband left me.’ "

Although Thorleifson could not comment on whether or not the FTC was planning to move against the companies involved, local authorities have begun to take matters into their own hands. Last week in Ohio, for example, a couple was sentenced to five years probation for defrauding victims of more than half a million dollars through their mail-order business, Cash Free Grants.

Nevertheless, new mail-order companies continue to surface with alarming frequency. "New outfits keep popping up," said Debbie Hubbard of the Siouxland Community Foundation in Iowa. "Just this week, I got a letter from an individual who said our name came from a totally different publication than I’d ever heard of."

Lewin, Tamar. “Scams Point the Desperate to Nonexistent Assistance.” New York Times 2/13/01.

Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Public Affairs
Location(s): Chattanooga, Iowa, Ohio, Seattle, Tennessee, Washington

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