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Scottsdale Police Labor Group Defends Big Payouts To Telemarketer

The Police Officers of Scottsdale Association, or POSA Inc., has been on the defensive after KJZZ raised questions earlier this month about its fundraising activity.

The Scottsdale police labor organization, a 501(c)5, raises hundreds of thousands of dollars every year primarily for its Christmas Shop With A Cop and Back-To-School events for underprivileged kids.

But the labor organization’s tax records obtained by KJZZ show that two-thirds of the money automatically goes to a for-profit telemarketer, PFR Promotions LLC, which handles the organization’s fundraising. The company shares an office space with the labor organization in downtown Scottsdale.

President Jim Hill defended the spending last week in a guest commentary in the Scottsdale Independent. He referenced the old adage “no good deed goes unpunished,” and called recent media stories “inaccurate attack pieces.”

He also said that every charity has overhead costs, and that he’d “rather dig ditches” than earn the $10 an hour making phone calls that PFR employees are paid.

Hill's wife, Cindy Hill, is the labor organization's executive director and made a salary of nearly $63,000 in 2012.

Jim Hill didn’t address the fact that the organization’s tax records show only a small fraction of annual donations, sometimes less than 10 percent, are actually spent on the charitable programs.

During KJZZ’s initial interview with Hill last month, he said the tax records must have been filled out incorrectly. He has since not responded to several requests for additional comment and follow-up questions asking that the record be set straight.

“Fundraising is a necessary, call it, evil, of the business,” Hill said during the initial interview. “If you want to raise that kind of money, you’re going to have to spend the money to have somebody go out and do it for you.”

Scottsdale is one of several law enforcement organizations in the Valley that hosts their own versions of Christmas Shop With A Cop.

The Phoenix police union, a 501(c)5 formally known as the Phoenix Law Enforcement Association, has been hosting its own event for four years.

Phoenix union president Joe Clure said the event is supported mostly by donations from its union members and corporate sponsors it has developed relationships with over the years. Telemarketing, on the other hand, is against the organization's bylaws, he said.

“We want the donated funds that people are kind enough to donate to us to go directly to the cause that they intended to donate to,” Clure said .

The Peoria police union, also a 501(c)5 formally known as the Peoria Police Officers Association, has its own Christmas shopping event, but it also doesn't use telemarketing for that charitable event or others. Union president Mike Faith said all of the money for the Christmas event is raised through an annual charity golf tournament.

“We just get enough to take our 60 kids, 50 kids, and we’re happy with that,” Faith said.

Records show the Phoenix and Peoria unions, through their separate charitable 501(c)3 organizations, raise a tiny fraction of what Scottsdale collects for its charitable programs. In 2012 the Peoria and Phoenix unions, through their charitable arms, raised about $30,000 each, while PFR raised about $969,000 for Scottsdale's labor organization.

Phoenix and Peoria spend nearly all of those funds directly on the causes, while Scottsdale has spent as little as 10 percent or less on its various charitable events in some years.

Also, almost all of the Phoenix and Peoria unions’ annual revenue comes from member dues.

The Scottsdale labor organization's revenue, on the other hand, is mostly derived from funds PFR raises for the childrens' programs. Member dues have made up anywhere between 5.3 percent and 11 percent of the Scottsdale organization’s total annual revenue since 2006.

In his guest commentary last week, Hill defended the Shop With A Cop event as a legitimate program, which is undisputed. Law enforcement officers from around the Valley volunteer to take hundreds of underprivileged kids on a $150 shopping spree to buy Christmas presents they might not otherwise receive, which is evident through several videos of past events that are available online.

Thus, the question here is not whether the Scottsdale organization’s programs are actually helping the community.

Instead, the question is really about ethics, said Sandra Miniutti, a spokeswoman for nonprofit watchdog group Charity Navigator.

“There are far more charities out there that are more efficient and we can’t afford to waste money on these for-profit firms,” Miniutti said.

Records show the Scottsdale labor organization has spent roughly the same amount money on its charitable programs every year — roughly between $45,000 and $115,000 since 2006 — while annual donations have jumped more than 82 percent since 2006. Today, it’s raising about $1 million annually.

So why does the organization continue raising far more money for the programs than it has ever needed to spend, and do so through a for-profit telemarketer that ultimately keeps the bulk of the funds?

That’s something that only POSA can answer.

EDITOR'S NOTE: This article has been modified to reflect the Policy Officers of Scottsdale Association is registered with the IRS as a labor organization.

Updated 12/16/14 at 4:45 p.m.

Kristena Hansen covered commercial and residential real estate for the Phoenix Business Journal for the past two years, which involved a range of topics from housing trends, publicly traded home builders and real estate investment trusts (REITs), and commercial development.