The Law of Fundraising. Bruce R. Hopkins

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Название The Law of Fundraising
Автор произведения Bruce R. Hopkins
Жанр Экономика
Серия
Издательство Экономика
Год выпуска 0
isbn 9781119873457



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from charlatans who prey on their charitable natures while challenging them to recognize that all are benefited when worthy charitable organizations are generously supported. The role of the states becomes even more critical when major governmental cutbacks shift the responsibility for relieving many of society's burdens to the charitable sector. The purpose of the states' charitable solicitation acts is to protect the states' residents and legitimate charitable organizations.

      The nonprofit organizations that collectively constitute the “third sector” of the U.S. economy are a loose and unorganized delivery system for services that are generally not profitable, are too cumbersome, or are too partisan for business or government to support. Our societal response is to fund these endeavors through private financial support of philanthropy. The impetus to modern philanthropy is the still rather vague and developing discipline of fundraising (also called development and/or financial resource development).

      For the most part, the third sector is populated by well-intentioned, hardworking individuals whose dedication to a particular cause or goal takes precedence over personal gains and rewards. This description also includes the majority of fundraisers, particularly those whose careers are encompassed by employment solely as staff of nonprofit organizations.

      The thinking of most practitioners is that the regulation of fundraising practices is similar to “preaching to the choir.” Although no precise sources of data are available concerning the verifiable amount of fraud or other abuse in fundraising, it can safely be said that the actual level is far lower than the general perception holds, and quite laudable when compared with other forms of activity in our society. By and large, the fundraising activities engaged in to benefit nonprofit organizations are conducted with an exceptionally high degree of honesty and professionalism.

      That perception of selfless service does not exempt fundraisers from scrutiny, nor should it; however, such a perception, coupled with the decentralized and diverse nature of the third sector, creates a perfect environment for miscommunication, misunderstanding, and distrust with regard to fundraising regulation.

      Although the regulated and the regulators have the same goal—the protection of the public from fraud and deception—the reality is that practitioners are generally unsupportive of regulation, and regulators are generally unaware of the third sector's nature and operations (concerning resource development) and of the impact that regulation has on delivery of services. In general, there is considerable confusion and too little action based on consistent dialogue and the understanding built by mutual respect.

      Both extremes of regulation—too much and too little—are regrettable; however, to engage in any level of regulation with so little dialogue between concerned and affected parties is like running in the dark. Rather than spend precious resources and valuable time highlighting specific shortcomings and failures of regulation from either perspective, those who perceive a need for regulation and those who are to be regulated should develop simple and consistent communication. This communication could take several forms, such as annual or biannual meetings of representatives from fundraising professional associations and legislators and/or enforcement entities; testimony or position papers delivered during the regulatory development process; meetings, conferences, and symposia sponsored by philanthropic foundations interested in the health and well-being of the third sector; and the like.

      The specific means of communications are not important if they are effective in stimulating and maintaining the much-needed dialogue. The real value lies in their ability to produce outcomes that answer some rather simple questions, such as:

       Are donors protected and is philanthropy nurtured?

       Are funds used to support those purposes for which they are solicited?

       Are the regulations fair to all nonprofit organizations?

       Can the regulations be evaluated for effectiveness?

      (a) Monitoring of Compliance Requirements

      An organization that is subject to a substantial number of the charitable solicitation laws—and that undertakes to register and report under them—should design a system by which it can remain abreast of its varied compliance responsibilities.

      The state charitable solicitation laws are published as part of each state's code of statutes. County, city, and town ordinances are similarly published. Other “law” with respect to these statutes and ordinances will appear as administrative regulations and rules, administrative and court decisions, and instructions with regard to applications and report forms.

      Therefore, the first step is to ascertain which of the 51 jurisdictions (50 states and the District of Columbia) do not have some form of a charitable solicitation act. At the present, there are three of these jurisdictions: Delaware, Montana, and Wyoming.

      The third step is to identify the jurisdictions in which, for one reason or another, the organization voluntarily refrains from conducting a solicitation.

      The fourth step is to identify the status of the organization's compliance with the applicable solicitation laws. A typical evaluation would utilize the six items in this analysis of jurisdictions:

      1 States in which the organization is registered.

      2 States in which the organization is exempt from one or more requirements.

      3 States in which the organization is pursuing initial registration.

      4 States in which the organization does not know its status but is investigating its status.

      5 States in which the organization is registered but where