Storms Brewing on Legislative Front

By Timothy Burgess

As charitable giving continues its steady upward climb and more Americans value the crucial role nonprofit organizations play in sustaining our cultural, social, religious and economic life, a significant threat lingers.

It’s time to identify this threat, speak out against it and unite behind the common cause of advancing fundraising. If we don’t mobilize and speak out, we’ll have nobody to blame but ourselves when the most sweeping, intrusive and draconian federal regulation of nonprofit organizations takes effect.

Government getting involved
For the past three decades, many states — and some local jurisdictions — have attempted to prevent charitable fraud by regulating nonprofit organizations, professional fundraisers and consultants. The result is a hodgepodge of rules, regulations and fees that have done little, if anything, to prevent abuse. My agency retains a specialist attorney just to make sure we’re in compliance. Many nonprofits do the same.

The charitable-registration bureaucracy has grown exponentially, and yet nobody has been able to document its effectiveness. Do you believe that there’s less charitable fraud because of state and local regulation?

If you listen to the recent hysteria in Washington designed to justify more federal regulation, then these local efforts have been a total failure.

But despite what has been a dubious effort at the state and local level, the Senate Finance Committee, led by Sen. Chuck Grassley (R-Iowa), its chairman and driving force, is preparing to foist a new set of federal laws and regulations on nonprofit organizations.

Believe me, the heavy arm of the federal government will be quite a different experience compared to what state and local jurisdictions have been trying to do. Some already have suggested that, at a minimum, the majority of nonprofit organizations — and there are 1.2 million charities, churches and social welfare groups in our country (about 85,000 new ones each year) — will have to add accounting or legal staff to handle compliance.