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The BlueHippo Foundation: What Has It Accomplished?

By Joseph S. Enoch
ConsumerAffairs.com

January 8, 2007

BlueHippo Funding An Investigative Series by Joseph S. Enoch • BlueHippo: Extreme Layaway • A Short History • The BlueHippo Foundation • Trouble Follows BlueHippo's Founder • What Should You Do? • BlueHippo's Response • BlueHippo Has Many Clones --- News • Buying A Computer With Poor Credit • Gateway at Risk in BlueHippo Class Action • Blue Hippo Pays $5 Million To Settle FTC Charges • Federal Court Strikes Blue Hippo's Arbitration Clause • BlueHippo Funding Settles $1 Million Maryland Case • West Virginia Sues Blue Hippo • Class Actions Target Blue Hippo • Consumer Complaints

While BlueHippo has profited handsomely from charging poor Americans top dollar for cheap products, the company's nonprofit arm, the BlueHippo Foundation, has touted all the great things it is doing to help close the gap of today's "digital divide" and to help the same people who fall victim to company's policies.

Joseph Rensin, BlueHippo's founder and CEO started the BlueHippo Foundation in May 2006 to "help brighten the futures and fortunes of America's children through improved financial literacy and a narrowing of the digital divide," according to the foundation's website.

BlueHippo has released a handful of press releases gloating about the scholarships it offers and about the foundation's "partnership" with the Boys and Girls Club of America. But specifics on actual donations are vague. It's also not clear whether the foundation is an actual 501(c)(3) nonprofit and if it is, its financial records will not be available to the public until at least June 2007.

The BlueHippo Foundation website, which is riddled with grammatical errors, claims two times that the company has a partnership with The Boys and Girls Club of America and proudly displays the club's logo.

"Through a newly formed partnership with the Boys and Girls Club of America, the BlueHippo Foundation is helping to narrow the America's digital divide [sic] by donating computers and equipment to Clubs in areas where access to advanced technologies may not be readily available," the website states.

A letter from BlueHippo CEO Rensin that appears on the website mentions the partnership.

But Brian Hill, a spokesman for the Boys and Girls Club of America said he had never heard of the BlueHippo Foundation.

"We don't currently have a national relationship with BlueHippo," Hill said.

"They probably made a few donations to some local Boys and Girls Clubs, put our logo on their website and are now claiming to have a partnership," Hill said after looking at the foundation's website. "We're going to have to get them to update their site."

Hill was right. Although BlueHippo vowed to engage in a variety of philanthropic activities "over the coming months," according to a press release, the BlueHippo Foundation has made only two donations to local Boy and Girls Clubs over more than six months.

Although the lengthy press releases are vague on any details regarding any actual donations, through research, ConsumerAffairs.com determined that to this day, the BlueHippo Foundation has donated a total of seven computers. Assuming the computers are a little nicer than the ones the company sells, the BlueHippo Foundation has donated approximately $6,000 worth of computer equipment.

The first donation, on July 27, 2006, was "the creation of three new computer labs for area chapters of the Salvation Army Boys and Girls Club of America," according to the lead in a press release.

Deeper in the correlating press release, one discovers that the computer labs actually already existed. The press release gives almost no specifics on the donation or what Boys and Girls Clubs actually received the donation.

ConsumerAffairs.com called all the D.C.-area Boys and Girls Clubs and determined that by "three new computer labs," BlueHippo actually meant "two new computers" to three Boys and Girls Clubs, according to those clubs' directors.

The second and final donation, according to the press releases was "computer equipment" donated to a Boys and Girls Club in McKeesport, Pa. on Oct. 5, 2006. The computer equipment was included in an auction. Although the press release is 257 words, there is no mention of what the "computer equipment" was or how much it fetched in the auction.

In reality, that "computer equipment" was in fact, one Gateway computer that fetched $600 in the auction according to Tom Maglicco, the club's director.

BlueHippo also has said that the BlueHippo Foundation will offer scholarships to "two Maryland community college students to assist in their study of computer science or mathematics," according to a press release.

So far it's unclear whether anyone has received any money through this scholarship.

The "scholarship" link on the foundation's website transfers to a page that has stated for at least three months that, "the BlueHippo Foundation will be offering dozens of scholarships to cover the tuition for students attending community colleges across the country. ... Details will be released in the near future."

Big Spender

The BlueHippo Foundation is not the first philanthropic endeavor for BlueHippo Funding.

While The Baltimore Sun was investigating BlueHippo in 2004, Rensin said he was donating money to the Baltimore Zoo. Before The Sun's article came out on Feb. 15, 2004, the website promised that some of the proceeds from sales would go straight to the zoo.

"We just write them a check," Rensin said in The Sun article. "We bundle them up and pay them once a quarter."

The day after The Sun's interview with Rensin, the newspaper called the zoo and zoo officials said they had received a payment that morning for $1,002. It was the first contact they had had with BlueHippo.

ConsumerAffairs.com called the zoo last month and zoo spokeswoman Lainie Contreras would not say how much BlueHippo had donated but verified that the zoo has only received one donation from the company.

Trouble Follows BlueHippo's Founder

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