United Cancer Council, Inc. - Page 70

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          mailings extensively with most of its other clients.  Before they           
          formed W&H, both Watson and Hughey had experience with the use of           
          sweepstakes contests on behalf of either their employers or their           
          clients.                                                                    
               As part of its initial program of prospect mailings for                
          petitioner, W&H tested various packages.  A “check” package                 
          performed best and became petitioner’s “control” package--a                 
          package that is mailed until a later package can net more money.            
          In November 1984 a sweepstakes (sweeps) package was tested and              
          also performed well.  As Watson put it in an October 15, 1985,              
          memorandum to several of petitioner’s directors and its executive           
          director, “At this point UCC had two control packages, the check            
          package which could be mailed to the traditional donor market;              
          and a sweepstakes offer which could be mailed to markets that               
          respond to sweepstakes.”                                                    
               A January 1985 major prospect mailing was planned using the            
          check package.  However, although the package had been approved             
          by petitioner, petitioner’s board of directors then urged that              
          the check package be replaced by a different package.  That                 
          different package then lost $110,000.14                                     

               14   The record reflects that petitioner’s directors                   
          directed the check package not be used, because they believed               
          certain representations contained in the package were inaccurate.           
          Recipients of the package were informed that if they made a                 
          contribution, petitioner then essentially would receive a                   
          matching donation from another party.  In actuality, at the time            
          the solicitation was made, petitioner had not yet secured a                 
                                                             (continued...)           




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