Local charity draws fire for missing financial report

South Carolina Secretary of State Mark Hammond announced today that his office has filed an enforcement action against the charitable organization Carolina Youth Club of America, Inc.  The action, filed with the South Carolina Administrative Law Court, seeks to enjoin the organization and its officers from engaging in further solicitation in the state of South Carolina.

The Secretary of State’s petition for injunctive relief alleges multiple violations of the Solicitation of Charitable Funds Act, including that the Carolina Youth Club has failed to file its 2016 annual financial report, and is soliciting contributions while its registration is suspended.

“The Carolina Youth Club has demonstrated blatant disregard for the law,” said Secretary Hammond.  “Without the filings required under the Solicitation of Charitable Funds Act, we have no way of knowing whether the children who are “club members” are benefiting from this organization’s charitable purpose, and neither does the donor.”

The Carolina Youth Club operates by hiring children as independent contractors to sell cookies and other items door-to-door, while employing the charitable appeal that the funds raised are used to provide recreational activities, electronics, and scholarships for the children. The directors ofCarolina Youth Club have operated similar organizations in other states, including New York, New Jersey, Maryland, Virginia and Georgia.

In addition to violating the filing requirements of the Solicitation of Charitable Funds Act, the Secretary of State’s petition for injunctive relief alleges that the Carolina Youth Club failed to disclose on its most recent registration statement that it had received a citation and fine from the South Carolina Department of Labor, Licensing & Regulation for violating child labor laws in its solicitation activities.

Secretary Hammond credits South Carolina residents for notifying the Secretary of State’s Office about their concerns with the Carolina Youth Club and helping to build the case against the organization.  “We received several complaints about the Carolina Youth Club through our Online Charitable Solicitation Complaint Form that was launched late last year,” said Secretary Hammond.  “This enforcement action demonstrates that the people of South Carolina are committed to holding charities and professional fundraisers accountable and maintaining transparency in charitable giving.”

Since the registration of Carolina Youth Club of America is currently suspended, anyone who receives a solicitation from this organization should notify the Secretary of State’s Office immediately.  Concerned citizens may file a confidential complaint through the Online Charitable Solicitation Complaint Form that is available on the Secretary of State’s website at www.sos.sc.gov, or contact the Division of Public Charities at 1-888-CHARITI (242-7484).

UPDATE

The head of Carolina Youth Club, Jule Huston, reached out to News 2 after we reported that the Secretary of State had filed an injunction against the organization.  Huston says the injunction is the result of misunderstanding between the organization and the state.  Huston says Carolina Youth Club has filed all of the proper paperwork and is waiting for the state to update its records.

 News 2 will continue to provide updates on this story as it develops.

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