BEFORE THE BEGINNING
Spring, 1977: The New York Board of Social Welfare (which registered charities before that function was transferred to the Department of State) convened a meeting of five northeastern states to explore uniformity in reporting (sound familiar?). In attendance were Massachusetts, Connecticut, New York, New Jersey, and Pennsylvania. At a second meeting held that summer, these states agreed to accept the New York annual report form in lieu of their own from any charity wishing to file it.
Fall, 1977: David Ormstedt, then with the Connecticut Attorney General’s Office, and acting as representative of these five states, makes a pitch to the 4th Annual NAAG Charities Seminar (held in San Diego) for uniformity among all states. By the next spring, 14 states had agreed to take the New York form.
Summer, 1978: The Pennsylvania Charities Commission hosts a meeting in Philadelphia of states interested in forming a new trade association. Sixteen states show up. Larry Alexander (PA) and David Ormstedt (CT) (who created the NASCO name) agree to organize things.
THE EARLY YEARS 1979-1983
The organizational meeting of NASCO is held in January in New York City. David Ormstedt (CT) is elected interim President pending the first annual meeting and seminar to be held in the fall.
A brief NASCO meeting is held in March in Williamsburg, VA, in conjunction with the 5th NAAG Charities Seminar. The purpose of the meeting is to organize state opposition to SOP 78-10, which would permit allocating fundraising costs to public education (sound familiar?).
The first NASCO conference is held in Ft. Mitchell, KY (across the river from Cincinnati) in September, with 27 state regulators attending (private sector was not invited). Topics: accounting standards; professional telephone solicitation; legislation; investigation techniques. David Ormstedt (CT)is elected President.
Meetings were held with the American Institute of CPAs (“AICPA”) to fight, delay, change SOP 78-10, to no avail; their minds were made up. Bill Levis, then affiliated with National Information Bureau (NCIB’s old anme), begins organizing a project to systematically compile data on the charitable sector. It didn’t take long to realize that the states were the best potential source for data, but that data could not be readily extracted because of a lack of uniformity in reporting formats. This leads to the creation of the Uniform Annual Report project.
The issues continue to be uniform reporting and telephone soliciting.
The Uniform Annual Report project is in full swing. it is a cooperative public/private sector effort. The objective is to devise a unfirom state financial report. The IRS was not participating.
The Supreme Court handed down Schaumburg in February. The decision was not then considered to be of much consequence to state regulation.
The NASCO annual conference is held in Chicago in the fall. Joe Shea (NY) is elected President. The NAAG Charities Seminar was held that April in Minneapolis. Many states attended both the NAAG and NASCO conferences (travel budgets were better then).
Early in the year, the states agree on a uniform state report, at which point the IRS expresses an interest in modifying its Form 990 so as to achieve a uniform state/IRS report. Discussions proceed quickly and, in the spring, agreement is reached between the states and the IRS. The new Form 990, a radical departure from the old, is born. It remains essentially unchanged today.
SOP 78-10 gets hotter as an issue.
The 7th NAAG Charities Seminar is held in Washington, DC.
The NASCO Conference is held in the fall in new Orleans. Frank Swenson (NJ) is elected President.
The states’ dire predictions of the consequences of SOP 78-10 begin to materialize. There was much discussion about developing uniform state accounting rules that would supplant SOP 78-10 and other accounting principles (e.g., valuing donated goods and services) for purposes of state reporting. However, state regulatory staffs were small – even in the most active states. Taking care of the basics was challenge enough. Few states felt prepared to go head-to-head with the accounting profession and their blue chip client charities. It must be remembered that the impetus for SOP 78-10 was the need for some establishment charities to get around state fundraising expense limits. Only New York took an initiative in this direction, which led to the development of the summary sheet that requires disclosure of joint cost allocations.
This was the first year of joint NASCO and NAAG conferences. There was consensus that a joint conference made more sense than two separate conferences. An agreement was negotiated on revenu8e, expense and task sharing. The conference was held in ASheville, NC in the fall.