CURRENT DEVELOPMENTS IN REGULATION AND ENFORCEMENT RESOURCE DOCUMENT
Focus: Changes in Fed/State Relationship
- Editors & Cindy M. Lott, “The Shifting Boundaries of Nonprofit Regulation and Enforcement: A Conversation with Cindy M. Lott,” Nonprofit Q., (Aug. 3, 2016).
- Cindy M. Lott & Marion Fremont-Smith, “State Regulatory and Legal Framework,” Nonprofits and Government: Collaboration and Conflict (2017, eds. Elizabeth T. Boris & C. Eugene Steuerle).
- FTC and fundraisers
- FTC Give & Take: Consumers, Contributions, and Charity (Mar 21, 2017)
- FTC: Complying with the Telemarketing Sales Rule
- FTC Press Release: FTC Settlement Bans Telemarketer from Claiming Sales Help Disabled Persons (Jun. 9, 2016)
- FTC Press Release: FTC Files Federal Court Actions Against Two Office Supply Schemes That Targeted Nonprofits and Small Businesses (Feb 11, 2016).
- Letter from Lois C. Greisman, Assoc. Dir. of the Division of Marketing Practices of the FTC to Michael Bills (Nov. 10, 2016).
- IRS990 data release, a landmark plus; legislative bar to information sharing with states still a handicap
- Amazon Web Services, IRS 990 Filing Data Now Available as an AWS Public Data Set (June 15, 2016).
- The Aspen Institute, Nonprofit Data Project Updates
- Letter from the Nat’l Ass’n of Attorneys Gen. to the Honorable Max Baucus, Chairman, Comm. on Finance, United States Senate and the Honorable Orrin Hatch, Ranking Member, Comm. on Finance, U.S. Senate (Oct. 28, 2011).
- Letter from Alissa Hecht Gardenswartz to the Office of Information and Regulatory Affairs, Office of Management and Budget, Re: Proposed Internal Revenue Service Form 1023-EZ, OMB Number 1545-0056 (Apr. 30, 2014).
- Press Release, Ariz. Office of the Attorney Gen., AG Brnovich Shuts Down Fake Veterans Charity Telemarketing Scam (Nov. 3, 2015).
- Attorney General Bacerra Secures Judgment against “National Cancer Coalition” for false financial reporting scheme. (Mar. 22, 2018)
- FTC, Give & Take: Consumers, Contributions, and Charity, Fed. Trade Comm’n (Mar. 21, 2017), (see slide 22 in “Give & Take Panel 1: Combatting Charity Fraud: Enforcement Issues” for a discussion of Florida Veteran’s Assistance Corp. and VFW-VA Assistance Programs Corp.).
- Press Release, Ill. Office of the Attorney Gen., Madigan Sues Fraudulent Charitable Telemarketers Again (Jan. 28, 2016).
- Charities Claiming to Help Veterans Barred from Iowa. (Mar. 21, 2018)
- Press Release, Iowa Office of the Attorney Gen., Judge Halts Deceptive Fundraising and Orders Business Reforms for Newspaper Archive Company (Dec. 3, 2015).
- Press Release, Kan. Office of the Attorney Gen., AG Schmidt: Arizona business to cease collecting payments, pay penalty for deceptive practices (Dec. 30, 2015).
- Attorney General Frosh Secretary of State Wobensmith Announce Settlement in Look-A-Like Cancer Charity Scheme.
- Maryland announces several press releases.
- Press Release, Maryland Office of the Attorney Gen., Maryland Officials Shut Down Charity Which Claimed To Help Veterans But Allegedly Misled Donors (Feb. 17, 2016).
- Press Release, Mass. Office of the Attorney Gen., Taunton Property Owner Fined $1.7 Million for Misuse of Charitable Funds, Unfair and Deceptive Practices (Nov. 10, 2015).
- Press Release, Mass. Office of the Attorney Gen., AG Settlement Bars Former President of National Graduate School from Leading Massachusetts Charities (Jan. 17, 2018).
- Massachusetts Preservation Corporation vs. Massachusetts Office of the Attorney General vs. Massachusetts Preservation Corporation, Matthew Haney, and Marlborough Lending LLC, Order for Judgment (Feb. 20, 2018).
- Texas-Based Fundraiser to Pay $75,000 and Will Correct Clothing Donation Bins. (Mar. 20, 2018)
- Press Release, Mich. Office of the Attorney Gen., Florida Charity to Pay Over $100k to Breast Cancer Research, and is Banned from Soliciting in Michigan for Ten Years Due to Deceptive Fundraising (accessed Apr. 13, 2017).
- Press Release, Mich. Office of the Attorney Gen., Utah Fundraiser to pay $90K and Cease Michigan Solicitations Through 2020 for Fundraising Misrepresentations (accessed Apr. 13, 2017).
- Press Release, Mich. Office of the Attorney Gen., Schuette: Deceptive Charity to Cease Operations after Misleading Donors (accessed Apr. 13, 2017).
- Press Release, Mich. Office of the Attorney Gen., Schuette Files Cease and Desist Against Dearborn-based Fundraiser for Illegally Operating Clothing Donation Bins (accessed Apr. 13, 2017).
- Press Release, Mich. Office of the Attorney Gen., Schuette: Texas-based Fundraiser Faces 319,000 Civil Violations for Deceptively Operating Michigan Humane Society Clothing Donation Bins (Apr. 7, 2017).
- Press Release, Mich. Office of the Attorney Gen., Schuette Files Cease and Desist After Veterans Charity Admits to Lying to Donors about Helping Michigan Vets (Mar. 9, 2017).
- New Hope Foundation, Intent to Deny Letter (Jan. 26, 2017).
- New Hope Foundation, Withdrawal Letter (Mar. 10, 2017).
- Press Release, Minn. Office of the Attorney Gen., Associated Community Services, a Professional Fundraiser, Barred from Soliciting Charitable Donations in Minnesota for Two Years; Will Pay $200,000 in Penalties and Restitution (Dec. 9, 2016), https://www.ag.state.mn.us/Office/PressRelease/20161209ACSSettlement.asp.
- Missouri Times, AG files federal lawsuit against professional fundraisers over no-call and other violations, MissouriTimes.com (Oct. 29, 2015).
- Attorney General Peterson Announces Settlement with USARS. (Mar. 20, 2018).
- Press Release, New Jersey Office of the Attorney Gen., New Jersey Division of Consumer Affairs Files Consumer Fraud Action Against Newark Organization that Allegedly Misled Charitable Donors, Transferred Contributions to For-Profit Business (Jan. 14, 2015).
- Operation Bottomfeeder: New York Attorney General Shuts down Brooklyn Telemarketing operation that solicited Funds for Sham Veterans Charity. (Mar. 26, 2018)
- Press Release, New York Office of the Attorney Gen., A.G. Schneiderman Announces Suit Against Brooklyn Telemarketing Firm Under Investigation For Possible Deceptive Fundraising Practices And Harassment (Dec. 21, 2016).
- Press Release, New York Office of the Attorney Gen., A.G. Schneiderman Announces Settlements With Vietnam Veteran’s Charity And Its Founder For Squandering Millions In Donations (Nov. 10, 2016).
- Press Release, New York Office of the Attorney Gen., A.G. Schneiderman Announces $1 Million Settlement With Officials Of So-Called Children’s Leukemia Foundation And Their Auditor (Dec. 17, 2015).
- Press Release, New York Office of the Attorney Gen., A.G. Schneiderman Announces $25 Million Settlement With National Veterans Charity And Its Direct Mail Fundraisers (Jul. 1, 2014).
- Press Release, Ohio Office of the Attorney Gen., Enforcement Actions Protect Donors and Charities (Aug. 25, 2016).
- Americans for Law Enforcement PAC and Alliance Marketing LLC Assurance of Voluntary Compliance (Feb. 12, 2018).
- Press Release, Penn. Office of the Attorney Gen., Bucks County woman who allegedly lied about having terminal cancer reaches settlement with Attorney General’s office (Jul. 6, 2016).
- Press Release, Penn. Office of the Attorney Gen., Attorney General Kathleen G. Kane’s Office Announces $10.8 Million Penalty Imposed On Ohio Men Accused Of Deceptively Collecting Charitable Donations (Feb. 26, 2016).
- Nonprofit Issues, AG May Use Tainted Evidence In ‘Redacted v. Redacted’ Case, Nonprofit Issues.com, Jan. 2016.
- Press Release, Texas Office of the Attorney Gen., Purported Veterans Organization Ordered to Shut Down in Texas for Deceiving Texas Donors (Nov. 18, 2015).
- Matt Gephardt & Michelle Poe, Utah gun safety organization admits to breaking consumer, charity laws, KUTV.com, Nov. 7, 2016.
- Press Release, Vermont Office of the Attorney Gen., Fee Scheme Using Online Obituaries Halted By Attorney General (Nov. 22, 2016).
- Press Release, Virginia Office of the Attorney Gen., Consumer Protection Settlement Reached with Donorworx, Inc. (Nov. 30, 2016).
- Press Release, Virginia Office of the Attorney Gen., Attorney General Herring Issues Restitution Checks to Consumers Harmed by Door-To-Door Sales Operation (Feb. 15, 2016).
FEDERAL TRADE COMMISSION
- Settlement with Corporations for Character Resolves Long-running Litigation Focused on Telemarketing Sales Rule (TSR) violations. (Mar. 20, 2018)
Trends, increased collaboration between charitable interests or their service providers and states/NASCO
- Jennifer Sauer, Listen With Your Heart, Give With Your Head: AARP Foundation 2016 Colorado Survey On Charitable Giving (Jun. 2016).
- NASCO Working Group re Crowdfunding and Peer-to-Peer Giving: states engaging with providers such as GoFundMe and others to evaluate disclosure and transparency issues and develop best practices; the group is also engaging with the Uniform Laws Commission re its study group re crowdfunding. Contact: Attorney Tom Donovan, Director of Charitable Trusts, New Hampshire Department of Justice.
- NASCO Working Group collaborating with BBB Wise Giving Alliance and Charity Navigator to explore potential for greater cooperation, and improve information sharing and accountability standards in existing as well as emerging ways of donating to charitable causes.
- NASCO liaisons to ABA re Model Nonprofit Corporation Act Revisions
- NASCO/State liaisons to FASB re audits, rule-making for nonprofits
Ripple Effect of CFA
- Press Release, Fed. Trade Comm’n, FTC, All 50 States and D.C. Charge Four Cancer Charities With Bilking Over $187 Million from Consumers (May 19, 2015).
- Ruth McCambridge, Colorado AG Seeks Dedicated Charity Oversight Unit, Nonprofit Q., Jan. 3, 2017.
- Attorneys General from Nebraska, Kansas, Vermont, New Hampshire and NAAG President CT Attorney General George Jepsen, all members of the NAAG Charities Special Committee established in late 2015, attended the annual NASCO conference in October 2016 to address the public regarding the role of AGs re charities and charitable giving, and to collaborate with regulator attendees on the private day in supporting increased multistate collaboration and cooperative actions. Nat’l Ass’n Of Attorneys Gen., Charities Committee, http://www.naag.org/naag/committees/naag-special-committees/charities-committee.php.
- NASCO Multistate Task Force established and active – creating heightened procedures for information sharing and collaboration among states re charitable activity that affects more than one state.
- Support from front offices and NAAG for training programs for charities regulators and AG offices in all areas related to charities or charitable solicitation regulation and enforcement, including emerging trends and technology re new forms of giving, and new resources for identifyin outliers and potential fraud.
- Increased collaboration with FTC
- Heightened attention to MRFP efforts to increase uniformity in interpretation and application of Charleston Principles
Donor Standing Issues
- Dickson v. Gospel for Asia, Inc., No. 5:16-CV-05027, 2017 WL 202185, at *1 (W.D. Ark. Jan. 18, 2017)
- Appeal filed: Appellants’ Motion for Stay Pending Appeal, Dickson v. Gospel for Asia, Inc., No. 17-1191 (8th Circ. Feb. 15, 2017).
- Speigel v Reynolds, Civ No. 1:15cv8504, N.D. Ill (complaint filed on 9/28/15
- Class action attorney filed suit against Reynolds, Sr., Reynolds Jr and wife Kristina Reynolds, and fundraiser Associated Community Services, alleging violations of the federal TCPA. Defs’ motions to dismiss were denied and ACS is not seeking permission to file motion for summary judgment prior to discovery.
Disaster Relief Issues
- Caitlin Dewey, How GoFundMe is making sure all of those Orlando victim fundraisers are legit, Washington Post (Jun. 14, 2016).
- Neb. Rev. Stat. § 87-302, (“A person engages in a deceptive trade practice when, in the course of his or her business, vocation, or occupation, he or she: . . . (21) In connection with the solicitation of funds or other assets for any charitable purpose, or in connection with any solicitation which represents that funds or assets will be used for any charitable purpose, uses or employs any deception, fraud, false pretense, false promise, misrepresentation, unfair practice, or concealment, suppression, or omission of any material fact”).
- Charitable Solicitations Regulation, H.R. 17-1158, 71st Gen. Assemb., Reg. Sess. (Colo. 2017).
- S. ___, 64th Leg., Reg. Sess. (Idaho 2017).
Bifurcation of state regulation/jurisdiction
- Cindy M. Lott, Elizabeth T. Boris, Karin Kunstler Goldman, Belinda J. Johns, Marcus Gaddy, & Maura R. Farrell, State Regulation and Enforcement in the Charitable Sector (2016).
Nat’l Ass’n Of Attorneys Gen., Charities Committee
- NASCO participation in International Charities Regulators Forum with eight other countries that have well-developed charities regulatory systems. Enables information sharing and policy comparisons based on experience. Participation in the international forum has also prompted increased information sharing between the U.S. states and U.S. federal authorities such as Treasury on issues such as identifying and reporting potential financial fraud and money laundering (i.e. FATF issues).
- Single Portal Multistate Charities Registration Development
- The GovLab at NYU engaged as project manager
- MRFP engaged in final stages of vendor selection
- Launch in phases anticipated to begin in fall of 2017; schedule to be determined with vendor
- Engaged with Advisory Committee of representatives from nonprofit sector and their professional advisors, technology professionals, researchers, registration service providers for continued input and testing re Single Portal development.
- Watch for updates at mrfpinc.org
- The GovLab at NYU engaged as project manager
(Compiled for the Georgetown CLE Conference 2017
Representing and Managing Tax-Exempt Organizations
Breakout Session: Update from the State AGs and FTC.)