One of the area’s hospital chains has sued a crowdfunding website based in Fort Collins, alleging it held unauthorized fundraisers for a nursing scholarship.
Centura Health sued Community Funded in federal court in Denver in late May.
A spokesperson for Community Funded, which says on its website that it’s helped raise $250 million for 100 institutions, described the lawsuit as a misunderstanding and said that the alleged fundraisers were test pages.
However, a Centura spokesperson said the organization sent a certified letter asking for the removal of the web pages prior to filing suit and did not receive a response.
Centennial-based Centura, a nonprofit healthcare network that operates hospitals including St. Anthony and Porter Adventist, reported 2019 revenue of around $450 million, according to tax filings.
Through the St. Anthony Health Foundation and the St. Anthony North Health Foundation, the corporation previously sponsored a nursing scholarship program.
But in its 16-page lawsuit, Centura said it did not enlist help from Community Funded.
“Earlier this year, Centura Health became aware of a false charitable campaign by a company called Community Funded that claimed to be fundraising on behalf of two Centura hospitals,” a spokesperson for the hospital said in a statement. “Centura never agreed to hire this organization and did not authorize it to use the hospital names in fundraising activity.”
When the lawsuit was filed, Community Funded listed two fundraisers supposedly linked to the hospitals’ nursing scholarship, including one that reported raised $20,307 from 62 supporters and listed Denver resident Carrie Bach as the host. Bach is named as a plaintiff on the complaint alongside Centura and St. Anthony.
According to the website, the campaign ended on March 12, 2020, and although Community Funded claimed the “campaign receives all funds,” the lawsuit contends Centura’s nursing scholarship program did not receive the donations and was unaware of the site’s existence until recently.
The lawsuit claims the hospital chain was unable to contact the 62 donors about the “misdirected donations.”
The second campaign appeared to have run through August 2019 and was hosted by Engage University, which the complaint describes as “a fictitious entity created by Community Funded.”
A representative from Community Funded said it never hosted live fundraisers for Centura, but rather the web pages found by the hospital were test sites set up by a former employee as a demonstration for Centura.
In 2018, Community Funded’s former CEO, McCabe Callahan, approached Centura offering to help the nonprofit raise money through the crowdfunding website, the representative said. The healthcare corporation ultimately declined Callahan’s proposed $6,000 one-year contract to host three microsites and a giving event.
“That prospective client had a relationship with a member of the former Community Funded management team and, in November 2018, requested the proposal of which the test page was part,” a spokesperson for Community Funded explained. “That page was never used for any live fundraiser, nor did it ever process any live transactions.”
“Community Funded has done nothing wrong, has never conducted any unauthorized fundraising, and is confident this misunderstanding will be resolved in a timely manner now that the prospective client has been made aware of the misunderstanding and as all facts come to light,” the spokesperson added.
Centura’s lawsuit nevertheless contends the Community Funded site used “words and images that appear to have been copied without authorization from materials created by Centura and CHICF, including specific passages related to the nursing scholarship program.”
Alleging trademark violations under the Lanham Act and invasion of privacy by appropriation, Centura asks the court to prohibit Community Funded from continuing to operate the website, and to pay damages, litigation costs and attorneys’ fees.
Centura is represented by attorney Chad Nitta of the Denver firm Kutak Rock.