Babaamaajimowinan (Telling of news in different places)

Attorney General Ellison reaches settlement with veterans charity and its founder over misuse funds, governance failures

March 18, 2024 (SAINT PAUL) – Minnesota Attorney General Keith Ellison today announced that he has reached a settlement with Sauk Centre veterans charity Eagles Healing Nest (“EHN”) and its founder and former director Melony Butler. In an Assurance of Discontinuance, Attorney General Ellison alleges that EHN failed to operate under the supervision of its board and allowed Butler unsupervised access to funds, some of which she used for her personal benefit. The Assurance also alleges that the organization failed to maintain adequate books and records, implement controls over the nonprofit’s finances, and make required regulatory filings with the state and federal government, among other violations.

The Assurance requires the organization, which appointed a new board during the AGO’s investigation, to completely separate from Butler and continue strengthening its governance practices and compliance with charities laws. The Assurance also requires Butler to pay $10,000 back to EHN as restitution for nonprofit funds she misused on personal purchases like hair and nail salons, clothing, gambling, food, and cigarettes. The Assurance also bans Butler from serving as an officer or director of a Minnesota nonprofit, in addition to other specific prohibitions.

“Minnesotans are generous folks and donate their hard-earned money to causes they believe in. Helping our veterans is a very noble cause, so it is all the more disappointing when charitable funds meant for veterans are misused,” Attorney General Ellison said. “The public relies on charities to have proper controls and to make sure funds are being used toward the organization’s charitable mission. Eagle’s Healing Nest lost sight of these important controls and degraded the public’s trust. This settlement marks a path forward for Eagle’s Healing Nest to rebuild that trust and ensure that its resources are serving its mission of assisting Minnesota soldiers and veterans.”

Butler founded EHN in 2012 to serve soldiers, veterans, and their families by providing housing, food, and other services. In 2022, the Minnesota Department of Revenue referred the case of EHN to the Charities Division of the Attorney General’s Office over the potential misuse of nonprofit funds. The Charities Division launched an 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 through the Charities Division has civil, not criminal, enforcement authority over the state’s nonprofit corporation and charitable trust laws.

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

 

Reader Comments(0)

 
 
Rendered 04/19/2024 04:18