Category Archives: Charity Registration

Charity Registration Relied On Differently

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registration sign

I’ve been collecting examples of how different types of organizations rely on Charity Registration to further their work. Mostly, compliance with the registration laws, which vary from state to state, is cited as a mechanism to protect the public from fraudulent nonprofits. That’s the avowed purpose of these regulations, though I often question whether they’re fulfilling their purpose.

The most common citation to Charity Registration laws in the alerts I get, is from the Better Business Bureau’s many offices. Most recently, playing off the Buffett/Gates challenge, BBB national suggests you can give like a billionaire if you do proper research and due diligence. Your transformation includes, “Check the organization out with . . . the local Charity Registration office.” Here’s a local BBB affiliate going into detail about its state’s registration statute, then correcting its post after the attorney general’s office read it. (They could have saved themselves embarrassment if they’d bought my ebook.)

The Better Business Bureau folks aren’t the only ones looking out for us. The press occasionally cites registration laws similarly. The Miami Herald gives advice to “Protect Yourself Against Phony Charities.” A Lincoln, NE accounting firm also wants you to stay safe from fraud. And charities want to keep you away from their unscrupulous counterparts. (Go to the bottom of the page to the KNOW YOUR CHARITY section, item number 6.)

Sometimes it’s a charity making mandatory disclosures, but this is much rarer than it should be. The American Cancer Society’s compliance page reveals that what’s required isn’t so simple. (Maybe my alerts don’t pick up similar pages and maybe other disclosures are in print.) ACS clearly takes registration seriously.

Freedom Riders USA used their Connecticut registration number in a press release announcing their recent fundraising run.

That’s something I hardly ever see in the U.S. and see all the time from English charities. That’s because much of the U.K. has a centralized registration system, under the Charity Commission for England and Wales, so there is one set of rules, and it includes disclosure of the charity registration number. The English (and Welsh) know to look for the standardised number. That goes a long way to insuring real protection from fraud.

Speaking on October 22nd at the 2nd Long Island Not-for-Profit Fiscal Conference

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Click on the image for event details

I’ll speak about Charity Registration in the afternoon session #2 at the 2nd Long Island Not-for-Profit Fiscal Conference.

What’s great about this event is they promise to have speakers who can “provide the expertise you need in a language you can understand.” I always strive to do that.

If you’re in the NYC or Long Island area and work with a nonprofit that needs more information on Charity Registration, this is a great event for you to attend.

Here is the conference website and registration form with speaker bios where you can get the schedule of speakers and events.

The 2nd Long Island Not-for-Profit Fiscal Conference – click on the link or the image to get more information.

I hope to see you there.

The Corporatization of U.S. Nonprofits

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Courtesy of TW Collins on Flickr.
Our country’s nonprofits are swiftly becoming more like their for-profit corporate counterparts.

Recently, Reuters told us nonprofits mimic the language of Wall Street, but for years donors have demanded to be treated as investors, and the institutions have obliged, referring to “returns on investment” and negotiating gift arrangements as contracts.  More recently, foundations and individual donors have insisted on outcome metrics, best practices, benchmarking, social impact and performance standards.  All of this was unheard of 7 to 10 years ago in nonprofit communities.

Donors and grantors are not alone in creating this change in culture and enterprise organization.  Federal and state governments also unite our nonprofit and profit-making corporations.  Since Sarbanes-Oxley reforms were levied against the profiteers in 2002, serious talk about identical improvements has trickled down to those with a calling higher than profit.  (I’m uncertain what tone to take about this: lamentation; resignation; pride; excitement; exhilaration.)

To my recollection, “board development” didn’t exist 10 years ago.  At the least, it wasn’t nearly as much a part of the nonprofit lexicon as today.

Our Internal Revenue Service, through its agents and tax-exempt commissioners, measures, and pronounces about good governance, accountability, financial integrity, transparency and oversight.

State Charity Registration laws, which I study, write and speak about a lot, have been enforced more in the last 18 months than anybody I know can remember.  The IRS stepped in here, too, probing more directly in its heavily-revised Form 990, an unusual instance of a federal agency asking about compliance with purely state laws.

Even the legal form of the nonprofit enterprise is becoming indistinguishable from its counterpart.  Several states have adopted the Low-profit Limited Liability Company, or L3C.    Profit is allowed but must not be the primary objective.  (By the way, you should pay attention to Gene Takagi, publisher of the blog at that last link.)

Nonprofits are becoming more like companies.

Part of me longs for the charming days, when do-gooders came together, appointed their parents and friends to boards, raised money, and did their best with heart and head to make a difference in their community.  We cannot return to that time, and we shouldn’t.  But I partly miss it.  It was so much easier.

I’m between resignation and excitement, closer to the latter.  Funders and governments demand change and nonprofits are complying, looking more like for-profits, at a pace that is accelerating and will not reverse.

This brings enormous, promising opportunity for smarter, more efficient execution of charitable missions, which should mean better service to those in need throughout the world.  (That sentence hits on several subjects debated by bigger thinkers and more august personages than me.)  Look at organizations like charity: water and The Center for High Impact Philanthropy to discover the possibilities.  (At The Center, I commend Autumn Walden to your attention.)

What examples do you see of the corporatization of nonprofits?  Are you excited by what we’re witnessing?  Do you miss the old days, or am I alone?

The UK Needs Its Buffett and Gates

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LONDON, ENGLAND - MAY 20: A general view of the Union Flag flying on Victoria Tower of the House of Parliament on May 20, 2009 in London, England. The Union flag flies on the tower, which is situated about the House of Lords, when parliament is sitting. (Photo by Oli Scarff/Getty Images)

A team of UK bloggers laments the lack of philanthropy the United Kingdom suffers. They call on the British government to learn from the Irish government’s initiatives to broaden philanthropy through education.

My suggestion is that the Brit’s new Minister for Civil Society (I’d enjoy handing out business cards with that title. It’s so genteel.) cultivate a few wealthy donors and urge them to speak publicly about their philanthropy and challenge other people of means to increase their own giving. I believe in trickle down philanthropy (but not trickle down economics).

Our Buffett Gates $600 billion challenge raises for all citizens the visibility of giving. Its impact isn’t limited to the trio’s wealthy friends and counterparts. A similar initiative in the UK could be supplemented by government education, as the bloggers suggest, to add greater impact among the broader citizenry. The Gates Foundation in the US is funding a similar initiative with a $3.7 million grant.

This combination of personal solicitation and broader appeal is a lesson in a basic fundraising strategy.