State will NOT pursue mandatory donor designation for non-profits
Updated August 18, 2011
Great news! The New Jersey Division of Consumer Affairs has informed us that it will not pursue its donor designation Pre-Proposal #2011-001 as a formal regulation. This proposal would have required covered organizations to provide a mechanism for donors to designate the specific programs to which they wish to direct gifts, and would have required organizations to inform donors that if they did not designate their gifts, the charity could use them for other purposes including fund raising and administration.
The Center for Non-Profits, along with numerous New Jersey and national organizations, submitted public comments to express concern about the pre-proposal. We thank everyone who took the time to provide input to the Center or to submit comments to the Division. Your strong responses clearly made the difference!
The Division may issue a formal notification in a forthcoming edition of the New Jersey Register. It has asked us to help spread the word about its decision in the meantime.
Please take a moment to write to Thomas A. Calcagni, Director of the NJ Division of Consumer Affairs, to thank him for deciding not to pursue this pre-proposal. Contact information is: Thomas A. Calcagni, Director, New Jersey Division of Consumer Affairs, P.O. Box 45027, Newark, NJ 07101, or e-mail email@example.com .
If you have questions or comments, feel free to e-mail Linda Czipo at the Center at lczipo @ njnonprofits.org (remove the spaces in the email address before sending).
Recent press coverage:
Original article; posted 6/28/2011; updated August 1, 2011
The New Jersey Division of Consumer Affairs is seeking comments on a “pre-proposal” for a mandatory point-of-solicitation disclosure for all organizations that raise $250,000 or more annually and which in their appeals describe more than one particular program for which funds are solicited. In such instances, organizations would be required to provide a mechanism for donors to designate the programs to which they wish to direct gifts. Phone, electronic or written solicitations would be required to include a notice that:
“the contributor may designate the program or programs to be funded with the contribution and, if more than one program is designated, the dollar amount or percentage of the contribution to be allocated to each. The notice shall also state that any part of the contribution that is not earmarked for a particular program or programs may be used for any program or programs in furtherance of the organization’s mission and for administrative and fundraising expenses.”
The pre-proposal, # PPR 2011-001, which appeared in the June 6, 2011, New Jersey Register, would also require that all pledge forms provide a means for the contributor to designate the programs to be funded with his/her contribution. It’s designed to address cases in which a charity focuses its appeals around particular programs (such as, for example, buying bulletproof vests for the troops) but actually spends a small fraction of funds raised on that activity and instead spends most on fund raising or administrative costs. (For examples of recent suits filed by state governments under a federal initiative entitled “Operation False Charity,” see http://www.consumeraffairs.com/news04/2009/05/ca_donation_fraud.html .)
A number of organizations already provide donors with such designation options as standard practice. However, the Division’s pre-proposal does raise some potential concerns, such as the following:
Deadline for public comment on PPR 2011-001 is August 5, 2011. A copy of the announcement is available on the Center’s Web site at www.njnonprofits.org/CharitiesReg_PPR_2011_001.PDF .
Thanks to all who contacted us to share how this proposal would affect you. You can continue to share your views on this or any other issue by emailing Linda Czipo at the Center at lczipo @ njnonprofits.org (remove the spaces in the email address before sending).