Public Policy Alert: New Jersey to Impose New Disclosure Regulations Regarding Charitable Solicitations
(July 12, 2011) AFP has learned from New Jersey's Center for Non-profits that the state's Division of Consumer Affairs has issued a proposal for a mandatory point-of-solicitation disclosure for all organizations that raise over $250,000 and provide appeals that name more than one particular program for which funds are solicited.
You can find the proposal here.
The proposal states that "[a]ny oral or written solicitation (including a telephonic or electronic solicitation but excluding any in-person solicitation) made by or on behalf of a charitable organization that received contributions of more than $ 250,000 in its prior fiscal year, which names more than one particular program for which contributions are solicited, shall include 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."
This provision gives the donor broad power to impose restrictions on their gifts, which could prove problematic for charities.
Furthermore, the proposal also requires disclosure of fundraising and administrative expenses by mandating that the notice to the donor "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." This raises the concern that this is an attempt to creating fundraising cost ratios as a means of determining a charity's effectiveness. AFP has always contended that any attempt to base charitable efficiency and effectiveness on such ratios is flawed.
AFP is very concerned about this proposal and its potential negative impacts on charities and will submit comments to New Jersey's Division of Consumer Affairs by the Aug. 5, 2011 deadline. We will keep you apprised of any developments. If you have any questions or concerns about this proposal, please contact Jason Lee, AFP's general counsel, at firstname.lastname@example.org.