Current Developments in Regulation and Enforcement

CURRENT DEVELOPMENTS IN REGULATION AND ENFORCEMENT RESOURCE DOCUMENT

Focus: Changes in Fed/State Relationship
  • 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).
Major Cases/Trends
Arizona:
CALIFORNIA:
DELAWARE
Florida:
  • 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.).
Illinois:
Iowa:
Kansas:
Maryland:
Massachusetts:
Michigan:
Minnesota
  • 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
NEBRASKA
New Jersey
New York
Ohio
Oregon
Pennsylvania
Texas
Utah
Vermont
Virginia
FEDERAL TRADE COMMISSION
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)
  • 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
New Legislation
  • 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
Nat’l Ass’n Of Attorneys Gen., Charities Committee
International
  • 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).
Technology Updates
  • Single Portal Multistate Charities Registration Development
    • The GovLab at NYU engaged as project manager
      govlab.org
    • 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

(Compiled for the Georgetown CLE Conference 2017
Representing and Managing Tax-Exempt Organizations
Breakout Session: Update from the State AGs and FTC.)