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Attorney General Ellison reaches voluntary settlement requiring environmental charity to improve governance

Honor the Earth cooperating to correct previous governance issues

February 2, 2024 (SAINT PAUL) – Minnesota Attorney General Keith Ellison today announced that he has reached a voluntary settlement with environmental charity Honor the Earth that requires the organization to continue strengthening its governance in the wake of past governance issues uncovered during an investigation by the Charities Division of the Attorney General’s Office.

Honor the Earth voluntarily complied with that investigation after a 2023 jury verdict held Honor the Earth liable for sexual harassment and retaliation against a former employee and ordered the organization to pay $750,000 in actual and punitive damages. The investigation uncovered additional evidence of the former leadership’s dismissal of internal misconduct that exposed the organization to significant legal and financial liability. The investigation also revealed additional governance issues, including inadequate financial controls and recordkeeping, and failure to comply with registration requirements for charities that solicit donations in Minnesota.

The Assurance of Discontinuance filed in Ramsey County District Court requires Honor the Earth to continue its efforts to strengthen its governance. Honor the Earth acted quickly to implement significant changes to its policies, procedures, and leadership in the wake of the 2023 jury verdict holding them liable for sexual harassment and retaliation. Those actions include:

• Replacing every member of its board of directors who served prior to the 2023 jury verdict by the end of 2024.

• Hiring a forensic accountant to complete a thorough audit of their finances.

• Hiring an attorney with experience counseling nonprofit corporations on compliance with Minnesota charities laws.

• Hiring a human resources consultant to strengthen the organization’s policies and procedures.

The Assurance requires the organization to complete its review of its policies, procedures, and finances within one year.

“Every Minnesota nonprofit, no matter the issues they work on or the communities they serve, needs to maintain trust and transparency with the donating public,” Attorney General Ellison said, “Honor the Earth’s did not meet the expectations that Minnesotans have for all charitable organizations. I appreciate Honor the Earth’s voluntary commitment to strengthening its compliance and rebuilding trust in the community.”

The Attorney General’s Office’s Charities Division launched this investigation under Minnesota’s civil nonprofit corporation and charitable trust laws, which require nonprofit directors and those who hold charitable assets to adhere to strict governance standards and fiduciary duties. In Minnesota, the Attorney General has civil, not criminal, enforcement authority over the state’s nonprofit corporation and charitable trust laws. Under state law, nonprofit officers and directors owe fiduciary duties to act in the best interests of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests.

The Minnesota Attorney General’s Office makes available a number of publications and pamphlets providing 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.

Minnesotans with concerns about governance or other issues at a nonprofit may submit a complaint on the Attorney General’s website using this form. Minnesota consumers may also contact the Attorney General’s Office by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).

 

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