Attorney General Ellison shuts down sham charity that misclassified hundreds of employees who staffed concession stands at Twin Cities stadiums

Investigation found employees were misclassified as ‘volunteers,’ despite nonprofit’s practice of paying ‘grants’ in exchange for work at concession stands

July 29, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has reached a civil settlement to shut down a Blaine-based nonprofit — MN Fundraising Initiative (“MNFI”) — over allegations that it was not operated for any charitable purpose but instead operated as a staffing agency to misclassify hundreds of employees as “volunteers” who staffed concession stands at sports stadiums and other venues in the Twin Cities — including Target Field, Target Center, Allianz Field, US Bank Stadium, Grand Casino Arena, and numerous University of Minnesota locations.

“Charities can’t do an end-run around employment law by abusing their nonprofit status to save on labor costs. Workers who are misclassified do not receive some of the most basic protections under the law, and that loss of protections hurts us all,” Attorney General Ellison said. “MNFI was a sham charity that took advantage of parents who wanted to afford their children’s activities by luring them into ‘volunteering’ their labor in exchange for future ‘grants,’ which is a clear violation of Minnesota law. MNFI and the for-profit operators it contracted with also suppressed the wages and opportunities of legitimate, unionized employees at the venues they staffed, robbed volunteers of basic worker protections, and passed on those costs to taxpayers. I’m pleased MNFI has discontinued its operations, and I hope that this outcome sends a strong, clear message to any other charities running this kind of scam that it is illegal and my office will not tolerate it.”

How the sham charity worked

MNFI, while claiming to operate a grant-making program to help families afford school expenses and activities like sports teams and dance, in fact operated as a staffing agency that provided low-cost labor for the benefit of vendors operating for-profit concession stands at major venues in the Twin Cities metro area. MNFI accomplished this through the systematic and unlawful misclassification of its workers as “volunteers,” rather than employees, even though the “volunteers” often worked alongside and performed the same labor as paid, unionized employees at concessions stands at the venues that are managed and operated by for-profit companies — including Minnesota Sportservice, LLC, Levy Premium Foodservice Limited Partnership, and Aramark Sports and Entertainment Services, LLC. The “volunteers” doing the work were commonly the parents of children participating in sports or dance activities or attending colleges or universities who wanted financial help with those costs.

While MNFI initially claimed the workers who staffed concession stands on its behalf were “volunteers” and “not paid for their work,” the AGO’s investigation revealed the nonprofit consistently paid them “grants” in exchange for their work. In return for MNFI’s staffing services, the for-profit companies that operate the concessions where the “volunteers” worked made “donations” to MNFI based on the number of workers MNFI provided or on a percentage of the concession-stand sales. Volunteers then applied to MNFI’s “grant-making” program for financial help with their children’s school, sports, or activity-related expenses. MNFI, which clearly led the “volunteers” to expect the organization would provide financial help, then made payments directly to those schools, teams, clubs, and individuals as reimbursement for expenses incurred in amounts reflecting what the “volunteers” had earned through their work.

When awarding “grants,” MNFI did not evaluate the financial need of its applicants — instead, “grants” were tied to the number of hours an individual “volunteered” for the organization. Nor did it make “grants” to the public at large: its “grants” went only to the “members” of MNFI, whom it barred from “volunteering” for similar sham charities.

The AGO’s investigation also uncovered that over the course of MNFI’s existence, the organization awarded “grants” totaling more than $1.1 million for the benefit of current or former members of its board of directors. One former board member alone received more than $237,000 in “grants” purportedly based on work that board member performed at MNFI-staffed concession stands.

While the Minnesota Fair Labor Standards Act exempts “any individual who renders service gratuitously for a nonprofit organization” from its coverage (Minn. Stat. § 177.23, subd. 7(7)), such individuals cannot receive “monetary compensation or other valuable consideration” for the exemption to apply (Minn. R. 5200.0230).

Misclassification harms workers, law-abiding employers, and taxpayers

MNFI’s sham operation dramatically reduced the nonprofit’s operating costs and allowed it to avoid its legal obligations as an employer, including contributing to Minnesota’s unemployment insurance program, obtaining worker’s compensation insurance, and remitting taxes to the state and federal government. The scheme further benefitted the for-profit companies that operate the concessions where MNFI’s “volunteers” worked: they were able to avoid the same legal obligations as an employer that MNFI did, significantly reduce their own payroll, and take a tax write-off on the “charitable” contributions that they made to MNFI.

Misclassification harms Minnesota workers, law-abiding employers, and the broader public. Not only do misclassified workers lose critical protections available to employees under Minnesota law, including a guaranteed minimum wage and overtime, but employers that engage in misclassification avoid contributing to Minnesota’s unemployment insurance program, obtaining worker’s compensation insurance, and remitting taxes to the state and federal government.

Terms of the settlement

In today’s settlement, Attorney General Ellison alleges that because MNFI’s concession workers received monetary compensation or other valuable consideration from MNFI in the form of “grants,” they were in fact employees of MNFI. Attorney General Ellison alleges that by structuring its nonprofit around the systematic and unlawful misclassification of concession workers as “volunteers” rather than employees, MNFI violated Minnesota nonprofit corporation laws, the Minnesota Fair Labor Standards Act, and Minnesota’s misclassification statutes.

Under the terms of the settlement, MNFI must wind up any remaining affairs and dissolve. Until its dissolution, MNFI must also provide the AGO with regular updates, including but not limited to updates regarding the status of claims made against the organization for payments owed for work performed at concession stands. MNFI has voted to file for Chapter 7 bankruptcy.

Attorney General’s civil enforcement authority

The Attorney General's Office, through its Charities Division, has civil enforcement authority under the state’s nonprofit corporation, charitable-solicitation, and charitable trust laws. The Charities Division does not have legal authority to enforce criminal laws.

Under Minnesota law, nonprofit corporations cannot pay their members dividends or other pecuniary remuneration, either directly or indirectly, unless the member is another nonprofit organization or subdivision, unit, or agency of the United States or a state or local government. Nonprofit board members and executives owe fiduciary duties to act in the best interests of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests and ensuring the nonprofit complies with all applicable laws and regulations.

Information about these fiduciary duties, along with other resources to help nonprofit leaders properly serve their organizations, is available on the Attorney General’s Office website.

The Attorney General’s Office also has civil, not criminal, authority to enforce the Minnesota Fair Labor Standards Act, the Minnesota Payment of Wages Act, and other laws protecting Minnesota’s workforce. Under Minnesota law, an employer that misclassifies its employees can owe civil penalties, back wages, and other compensatory damages, even if the employer did not intentionally misclassify its employees. Information regarding worker rights and protections, including resources about independent contractor misclassification, wage theft, and women’s economic security, is available on the Attorney General’s Office website.

Workers with concerns about misclassification or other complaints about systematic violations of state and federal wage laws are encouraged to contact the Attorney General’s Office. The public may also submit complaints Relevant complaints may be submitted by using the Wage Theft Complaint Form (also available in Spanish) or the Charities/Nonprofit Complaint Form available on the Attorney General’s website, or by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).