The NASCO Board responds to The 50-State Index of Charity Regulations, released by Philanthropy Roundtable in January, as follows:
We are concerned that some of the information contained in the report about current state laws and rules may be incomplete. We encourage charities to be in direct contact with their state charity regulatory offices if they have questions about specific laws or regulations in their states.
We join the report’s recognition of the need for more research related to charity regulations and charitable activity, especially with regard to causation and correlation. Our view is that, although regulation may be one factor contributing to the formation and operation of more charitable organizations, there are likely other factors that are also significant. We look forward to more research in this area.
We believe that the report’s key assumption that the number of charitable organizations is a good measure for the volume of actual charitable activity needs further analysis and study. For example, having multiple small charities with the same purpose could be an inefficient and ineffective use of charitable dollars, resulting in more funds being used for administration and fewer dollars for actual charitable activity.
Relatedly, our experience as regulators tells us that there are tax-exempt organizations in existence that might be counted as charities for purposes of this report, but that not actually operating for charitable purposes but rather are fraudulently misrepresenting themselves as charities.