A tough week for the North Shore Animal League

From ANIMAL PEOPLE, October 1996:

North Shore Animal League was named in late July
along with 78 for-profit firms in a Federal Trade
Commission lawsuit filed on behalf of the Connecticut
attorney general’s office, alleging violations of
direct mail sweepstakes laws, and was simultaneously
rapped by the Council of Better Business Bureaus
Philanthropic Advisory Service for failing to meet the
CBBB requirement that “Soliciting organizations’
financial statements shall present adequate information
to serve as a basis for informed decisions.”
Neither matter is as serious as it sounds,
North Shore president John Stevenson told ANIMAL
PEOPLE. North Shore was wrongly included in the
FTC lawsuit, Stevenson said; as a nonprofit, North
Shore isn’t covered by the same law as the other
defendants, and holds a legal opinion issued by the
Connecticut attorney general’s office just two years
ago agreeing that North Shore sweepstakes mailings
comply with the applicable law.

“If anything needs to be changed,”
Stevenson said, “we’ll make sure we understand
what it is we have to do, and then we’ll change it.”
The CBBB rebuke occurred, CBBB
acknowledged, due to differences between CBBB
and Stevenson, a nationally recognized authority on
nonprofit law, over the meaning of a much disputed
portion of the American Institute of Certified Public
Accountants Statement of Position 87-2, re the declaration
of certain direct mail costs as program expense.
Acknowledging that “application of the
SOP 87-2 accounting guidelines has had various
interpretations,” CBBB noted that it was saying it
was unable to determine North Shore compliance
with the standard in question, not that it didn’t meet
the standard, and that North Shore did meet all 18 of
the other CBBB standards.
Said Stevenson, “We agreed to disagree,
until the AICPA statement is clarified.”

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