A message from CEO Mark Schulhof

 

June 30, 2014

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When my great-grandfather started in this business 70 years ago, he had little more than an idea and a mission – to help charities raise funds to better help communities in need. It is that mission that has been our guiding principle at Quadriga Art.

Over these many decades, we have helped hundreds of nonprofit organizations in various stages of their maturity raise money in order to meet their mission, goals and objectives. At the core of our company’s values is a focus on innovation, entrepreneurship, creativity and a deep and abiding sense of ethical responsibility to support the charities and communities we serve. We are committed to thinking big and making a difference, as well as offering our clients the most effective mailing solutions possible.

Several years ago, our company made a decision to begin assisting some charitable organizations that were in their early stages and did not have the resources to undertake a direct mail donor program. For less than 3 percent of our clients, we made special accommodations, including special rates and payment plans. I am proud of our ability to take on startup organizations that did not have an email list, donor file, or the money on hand that it takes to build a long-term, revenue-producing direct mail program.

Sometimes a program like this is successful, and sometimes it results in a net loss for us as the vendor, as it did in the case of the Disabled Veterans National Foundation (DVNF). In just over four years, DVNF acquired nearly 2.8 million donors, making it one of the largest donor databases among veterans groups.

However, this acceleration of popularity and name recognition for DVNF resulted in a fundraising strategy that outpaced the charity’s programs and services. We mailed too much, and too quickly, for a young charity. We made mistakes that permitted donors to believe that greater programs were in operation before they could be fully realized. And in our work to assist this young organization, our efforts created the impression that we had an operational involvement with the charity itself.

Today, the New York Attorney General’s Office announced a national settlement in which Quadriga Art has agreed to pay $9.7 million to support federally-managed research and development programs to improve the care, treatment and rehabilitation services available to disabled veterans of the U.S. military. The DVNF’s program was intended to help veterans across the country, and we are pleased that the settlement will go to fulfill that commitment. As part of today’s settlement, we have also agreed to forgive DVNF’s debt, which includes more than $8 million that we redirected from their receivables account to ensure they had funds for mission services. We look forward to continuing to provide services to DVNF and the veterans they are committed to assist.

Chairman of the Board Tommy Schulhof, who was responsible for the DVNF account, has also resigned.

We have taken responsibility for the mistakes that were made with this startup organization. I want to personally and deeply apologize for our actions and for any adverse impact this may cause.

It is my firm belief that from this experience we – as a company and as an industry – will grow stronger. We have taken steps to ensure that this situation will never occur again, reformed our business practices, and dedicated ourselves to serving as a role model for the industry as a whole. The lessons learned from this experience will be applied toward every aspect of our business, every day, as we look in new and exciting directions for opportunities to help our industry innovate and improve. But while our business practices will necessarily evolve, our commitment to excellence and our core values will remain steadfast.

We at Quadriga are thankful for your commitment. We continue to be proud of the work we do and the spirit in which we do it. We will continue to innovate, invest and execute to make this a better company and make our clients better able to help those they serve.

Mark Schulhof, Chief Executive Officer, Quadriga Art

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