Legislative Environment s Impact on Fundraising Practices in Visual Studio .NET

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Legislative Environment s Impact on Fundraising Practices
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Ms MacNab: I see it happening right now because regulatory supervision is almost nonexistent Whereas, in the financial world, you have State and Federal agencies fighting a turf war over who gets to take care of the bad guys, when it comes to charities, it is kind of a reverse turf war Everybody assumes that someone else will handle it Even though there are several agencies that can take over the regulatory spanking, no one is stepping up to the plate Also, audits are nonexistent If you talk to a handful of charities, no one can remember the last time anybody lost their tax-exempt status If you are going to have a voluntary compliance system, there has to be some expectation that you can get caught if you do something wrong The second thing that is going on, why charities are participating in these plans, is right now charities are having a couple of hard years Fundraising is down, corporate donations are down They have lost money on their own portfolios in the market, and they are looking for money anywhere they can get it (Senate Finance Committee Hearings, June 2004)
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Better Business Bureau Wise Giving Alliance Testimony Similarly, evidence of donor apprehension is seen in the testimony by BBB of America Art Taylor, president and CEO of the BBB Wise Giving Alliance In 2001, the Alliance commissioned Princeton Survey Research Associates International to conduct a major donor expectations survey, the results of which are available on the wwwgiveorg website Among the key findings of the Wise Giving Alliance survey were: 70% of respondents say it is difficult to know whether a charity is legitimate 44% say it is difficult to find the information they want in making a giving decision 50% say they would be very likely to get information they wanted from the charity itself, although only 50% think the charities provide enough information about their activities to help them decide about giving Donors are not sure what information they need or where they should get it, or in some cases, how to assess the information they have They are looking for help in finding accountable charities The Alliance produces reports on national charities that specify whether an organization meets or does not meet the Standards for Charity Accountability Our reports do not rank or grade charities, but rather seek to assist donors in making informed judgments about charities soliciting their support In addition, the Alliance goes beyond standards to issue special alerts and advisories for individuals on topics related to giving These include tips on donating cars, as well as tips on charity telemarketing, police and firefighter appeals, and charitable responses to disasters
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Testimony of Brian Gallagher CEO of United Way of America Other testimony on fundraising and nonprofit accountability at the 2005 Grassley hearings included comments from Brian Gallagher, CEO of the United Way of America Mr Gallagher commented [that]:
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The number one reason that people don t have faith or trust in the nonprofit sector is that donors don t know how charities spend their money It s overwhelming 71% of respondents that don t trust charities said that their trust in nonprofits would be greater if they knew how the money was spent To address that concern, I respectfully suggest that nonprofit organizations be asked to report concrete results annually that are tied directly to their missions, not just the level of activity Perhaps a results section such as that can be added to the annual Form 990 We should be asked to report concrete results that are tied directly to our missions, not just the level of activity we produce When you re asking people to contribute, you re asking for an investment in your mission And like a for-profit business, you are then accountable to your investors, not just for keeping good books, but for creating value and offering a concrete return (Gallagher, 2005)
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The Grassley hearings in 2004 and 2005 continue to emphasize that the board is now held ultimately accountable for the actions of the nonprofit staff This means that the board must provide active oversight to development and fundraising efforts This expectation is further codified in California s Nonprofit Integrity Act (SB 1262), which obligates the board to review all contracts with fundraising vendors The testimony from Mr Car at the 2004 Grassley hearings was particularly chilling in terms of how little nonprofits actually received from these endeavors
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Example of State Law Relative to Fundraising: Provisions of California s SB 1262 Nonprofit Integrity Act to Fundraising Activities
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The California Nonprofit Integrity Act (SB 1262) is the first of what might be many other Sarbanes-Oxley clone laws dealing with nonprofits As other states adopt these types of clone laws, the topic of fundraising will surely be a common theme As was codified in the new California law on nonprofit integrity, the board has an obligation to ensure that fundraising activities are conducted with integrity, with attention to donor privacy Further, the board has an obligation to perform due diligence before signing contracts with third-party fundraising vendors The California law also placed the burden of closer supervision of all fundraising activities on the shoulders of the nonprofit (ie, the board) Of particular note should be the provision in the law that the Act applies to all corporations formed under the laws of other states that do business in California or hold property in California By doing business, this includes soliciting donations in California by mail, by advertisements in publications, or by any other means from outside California (Cal-
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