A lawn-care company that sells toys during the holiday season is being accused of misleading people who want to help the less-fortunate.
Canadian Property Stars (CPS), of Kanata, Ont., is a privately-held corporation and is not obliged to release its financial statements or abide by the fundraising industry code of ethics.
CPS president Ben Stewart won’t disclose what percentage of the money raised in the toy drives actually goes to charity.
Stewart said staff are paid a commission of 14 per cent, which critics say raises concerns that percentage could be considerably higher than the portion going to charity.
The company is operating in Alberta without a fundraiser’s licence as required by provincial law.
Charities have told Go Public they’re concerned CPS’s toy drives could hurt the reputations of charities it claims to be supporting.
Staff shift from lawn care to selling toys
Stewart said the CPS Toy Drop is a way to help existing toy drives meet their goals and fill a three month window when his lawn maintenance company has no revenue.
In spring and summer CPS staff go door-to-door selling driveway sealing, window washing and lawn aeration.
For the past two winters CPS has branched out to selling toys.
It placed online ads offering “an amazing opportunity to make BIG $ raising money for a reputable Canadian charity….$100 to $400 CASH paid daily!”
CPS sold the toys in Edmonton, Calgary and other Alberta municipalities, as well as in Ontario.
Charity concerned reputation may be damaged
CPS approaches supermarket and big-box store managers asking for permission to set up a table for a local charity fundraising event.
The store manager is asked to choose which charity should receive the money.
CPS staff tell customers they are raising money for the local charity, and ask them to buy a toy from the table then place it in a donation bin.
The toys usually cost $10, $20, or $30, but have been described as being of dollar store quality.
When asked, Stewart could not provide the toys’ cost per unit.
Jessica Ryder said when she went into Canadian Tire in Edson, Alta., last month she was asked if she would like to help the local Kinettes club.
She called the $100 for four toys “exorbitant.”
When she declined, she said the seller wanted to know why she wasn’t interested in helping her community.
“He was aggressive,“ Ryder said. “I’m upset because I feel he was taking advantage of the people in our town.”
On its website, CPS responds to concerns of aggressive sales practices by saying
“CFE (Charity Fundraising Events) does not tolerate its staff engaging in any aggressive behaviour, whether directed at customers, the staff of its host businesses or other CFE staff.”
The president of the Edson Kinettes confirms CPS has donated several boxes of toys but says CPS never asked them to be part of a toy drive.
Krystal Baier said it’s important the club have control over how a charity drive is conducted and how the Kinettes’ name is used.
“No one said anything to us about selling overpriced toys to donate to us,” Krystal Baier said.
Baier said the first she heard of CPS was when she started getting complaints.
She said another charity in the community that contributes to the Kinettes accused them of poaching donations away from their toy drive.
“We don’t want this to hurt our reputation,” Baier said. “We didn't sign up for this.”
Baier said the Kinettes didn’t want to accept CPS’s toy donation, but felt donors had bought them to help the club.
Owner self-described ‘serial entrepreneur’
CPS owner Ben Stewart is a former kickboxing star and author of the self-published book “Millionaire in 90 Days.”
On his personal website, Stewart describes himself as a “serial entrepreneur,” who knew what he wanted to be by the age of five, when his hero was the fictitious CEO Victor Newman, a character of the soap opera “The Young and the Restless.”
Stewart claims his company gave $25,000 to local charities in 2013 and pledges to give $20,000 this year.
However, Stewart said no-one should confuse CPS with a charity or a fundraising company.
“(CPS is) 100 per cent a sales and service company,” he said.
“We have absolutely no ties to charities, we never have, and it is in our mandate and processes and training that we ensure our staff know never to say we are a charity.”
Three national charities distancing themselves from company
In 2012, CPS gave $10,000 to UNICEF Canada.
A spokeswoman said UNICEF accepted the money to honour the wishes of donors, but has no affiliation with CPS because it only partners with organizations which comply with accepted ethical standards for charities.
Habitat for Humanity received $30,000 from CPS, but says it won’t deal with the company again because of donor complaints about how CPS represented its relationship with Habitat and used the Habitat brand.
The Salvation Army received $10,000 but says it told CPS to stop using its name and logos to raise money.
A spokesman said the Salvation Army asked for, but didn’t receive, an accounting of how much money was collected using its name.
Stewart promised Go Public he would disclose his revenues from toy sales, but later referred us to his lawyer, who said he advised Stewart to keep the information confidential.
Company ‘selling deception,’ expert says
This lack of transparency is troubling, according to Peter Popkowski Leszczyc, professor of marketing at the University of Alberta and a specialist in consumer behaviour.
Popkowski Leszczyc called the company’s advertised donations “peanuts,” considering it claims to have sold 75,000 toys at $10, $20 or $30 apiece in the past two years.
He said those numbers suggest less than five per cent of shoppers’ donations may be going to charity.
“When I look at these numbers it looks purely that they’re cashing in on charity,” Popkowski Leszczyc said.
Popkowski Leszczyc says, despite Stewart’s claims to the contrary, CPS’s website and ads clearly identify it as a charity fundraiser.
“In my opinion they’re just selling deception,” he said.
CPS’s behaviour, especially its use of commissioned sales staff, raises red flags for Andrea McManus, past-chair of the Association of Fundraising Professionals.
“Being paid on a commission basis is considered highly unethical” (by fundraisers), Mcmanus said.
“Once you enter into a commission basis there’s really an element of personal gain.”
McManus suggests CPS is using charities’ names and reputations for its own purposes.
“I think it’s a predatory business model,” she said.
‘Not trying to harm anyone’
Stewart said the toy sales are “not a profitable venture” for his company.
“The goal for us is to raise as many toys as possible for needy children in communities,” Stewart said.
“The community is coming in, buying a toy, dropping it in the bin. And we’re … saving them the trip and the time of going and purchasing it themselves. So we’re just enabling,” he said.
“We’re trying to do good in the community. We’re not trying to harm anyone,” Stewart said