People Helping Horses bucks director and will audit finances
SEATTLE – An investigation by the Washington State Attorney General’s Office has led to significant changes to a Snohomish County horse rescue’s management and new controls on the organization’s fundraising and financial practices.
In a settlement sent for filing today, Arlington-based People Helping Horses agrees to use solicited funds for the specific animals or programs mentioned in appeals and to audit their finances. Its former executive director, Gretchen Salstrom, whom the Attorney General’s Office accuses of misusing charitable funds, is barred for ten years from leading a Washington state non-profit. Salstrom also settled with the Attorney General’s Office.
“Gretchen Salstrom was helping herself to money intended to help horses,” said Washington State Attorney General Rob McKenna. “She used the group’s money to pay for her own horse and dog-breeding business, and used the non-profit’s credit and debit cards for questionable travel and entertainment expenses.”
A December, 2011 tip from a concerned citizen led the Attorney General’s Office to look into the organization, which had raised over $1 million the previous year, and its leader. It found multiple violations of the state’s Consumer Protection Act, which bars misleading and deceptive business practices. It also found violations of the Charitable Solicitations Act, which governs the fundraising practices of non-profits.
“In fundraising appeals, People Helping Horses said they offered a therapeutic riding program for kids with health challenges even though they had terminated the program,” said Assistant Attorney General Sarah Shifley, who handled the case. “They claimed they partnered with other horse education programs and schools. They said they checked up on horses after they were adopted from their shelter. None of that was true.”
Among other agreements in the settlement, a consent decree in Snohomish County Superior Court, People Helping Horses will:
- Not make misrepresentations to donors or potential donors;
- Hold donations in segregated accounts and apply such funds for purposes stated in fundraising appeals;
- Create and maintain records documenting the amount of restricted donations that it receives and how donations are used;
- Implement financial controls, including prohibiting staff members from using the organization’s financial resources for personal use;
- Obtain a financial audit by a certified public accountant every three years and provide it, upon request, to the Attorney General’s Office;
- Provide management training to its Executive Director and any other executive-level employees;
- Comply with all registration requirements of the Secretary of State’s Charity Program before soliciting and accepting donations;
- Not enter into any contract, lease, or other business agreement with Gretchen Salstrom; and,
- Not retain Gretchen Salstrom in any capacity or place her on its Board of Directors.
People Helping Horses is liable for $50,000 in penalties, which are suspended as long as the organization follows the details of the settlement. Salstrom will pay $5,000 in attorney’s fees and faces penalties of $25,000 per violation if she fails to follow the injunctive portions of a separate settlement entered with her individually.
“We often use the old saying, ‘buyer beware’ when it comes to businesses,” said McKenna. “But this settlement shows that the giver ought to beware, too.” Before giving to a non-profit, McKenna recommends checking the Secretary of State’s Charities Program website in order to learn more about how specific charities spend their money.
Janelle Guthrie, Director of Communications, (360) 586-0725