AG Bonta Fines Nonprofit for Misdirected Donations

Lori Kalani, Bernard Nash
Cozen O'Connor
Contact
LinkedIn
Facebook
X
Send
Embed

Cozen O'Connor

  • California AG Rob Bonta reached a settlement with defunct San Francisco nonprofit ZeroDivide and its directors and officers (collectively, “ZeroDivide”) to resolve allegations that it misspent donations in violation of California charitable trust laws. The complaint also alleges that members of Zero Divide’s board of directors knew of this activity and in failing to stop it, breached their fiduciary duty to the nonprofit’s donors.
  • According to the complaint, ZeroDivide—which focused on bringing technology to low-income communities—redirected over $606,000 in donations specifically earmarked for two charitable programs to other expenses such as salaries and other unrelated programs from 2013 until it ceased operations in 2016. During that time, the nonprofit’s directors and officers allegedly knew of and failed to prevent this conduct, thereby breaching their fiduciary duties to donors.
  • Under the terms of the stipulated judgment, ZeroDivide will pay $326,008 in damages and $138,525 in penalties, late filing fees, and attorney’s fees. ZeroDivide must be dissolved and its remaining assets distributed to one of the intended donation recipients, and two of its officers will be prohibited from leading or working at a charity in California for three years, among other things.
Send Print Report

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor
Cozen O'Connor
Contact
more
less

Cozen O'Connor on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign Up Log in
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide