As promised in the last blog post, today is the first post of the new preliminary Accountability Standards. Just to recap, we’ll be highlighting every two to three days one of the new standards and inviting you to comment on them. Since the standards are broken up in to the same four categories as before – Public Disclosure, Governance, Financial Activity and Fundraising – we’ll take the sections in that order. In addition to getting feedback about the new standards through this blog, we’ll also be heading out for a series of town hall forums across throughout the summer. Keep checking out the Accountability Standards page on our website for updates.
To start off, we’re going to be highlighting the Legal Compliance standard. Like all the standards that will follow, it’s actually two parts – a philosophy statement that gets at “why” this is important, followed by the standard which gets at “what” the standard is looking at.
To uphold the public’s trust in nonprofits and support regulation of charitable solicitations, a nonprofit should at a minimum carry out its actions in the accordance with applicable state and federal charity law. Federal and state regulation of nonprofits is essential to protecting charitable assets and safeguarding the public against charity-related consumer fraud.
For the previous three years (including the year under review), the nonprofit has not violated applicable provisions of state law in which the nonprofit is registered to fundraise or any federal law. If the nonprofit is actively fundraising outside of its home state, it is taking steps to monitor and ensure compliance with other states’ laws regarding charitable registration.
Unlike many of the other Accountability Standards that focus on reasonable expectations of accountable nonprofits that is often a higher bar than what law requires, this standard is strictly focused on whether or not the nonprofit being reviewed has violated any applicable laws. Despite this being what some might view as a relatively easy standard to meet, a lot of times a nonprofit doesn’t register (or doesn’t know that it has to register) in a state where it’s fundraising. (39 states and the District of Columbia require nonprofits to register). We’d be interested in hearing from people what they think of this. Is it too much to expect a nonprofit to register in every state it has a donor, even if it may cost more to register in that state then they get back in donations?
To quickly find out which states require nonprofit registration, check out the Unified Registration Statement website, which is a joint project of the National Association of State Charities Officials and the National Association of Attorneys General.
Next up: Public Information & Annual Reporting