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AFP Urges Members to Oppose California Bill 2855

Despite changes being made to the bill, AFP continues to oppose California Assembly Bill 2855, which requires any solicitation document produced by a charity to include the address for an Attorney General’s website containing information about consumer rights and protections and charity research resources.

AFP calls on its members in California to contact their Assemblymembers, using the template communication below. You can find your Assemblymember here.

Introduced by Assemblymember Jim Frazier, AB 2855 would also require a link from the charity’s website to the Attorney General’s website.

As originally written, the bill would have required disclosure of administrative and overhead expenses and a copy of the most recent Internal Revenue Service Form 990 filing on a nonprofit's webpage. The bill was amended in its current form during committee consideration.

AFP is supportive of demonstrably necessary laws, such as when AFP worked with the California State Legislature in the drafting of the California Nonprofit Integrity Act. But in each case, the laws and regulations that AFP has supported have been balanced with the charitable sector’s need to raise funds for the critical programs it provides.

Even amended, AB 2855 fails to provide that necessary balance. The bill still requires any solicitation document produced by a charity to include the address for an Attorney General’s website containing information about consumer rights and protections and charity research resources. This provision requires all of the soliciting charities to revise their solicitation documents and websites.

The cost to revising and reprinting these charities’ materials and altering their websites is significant and will increase administrative costs. There is no proof or data indicating that there will be any positive outcomes from including references to the Attorney General’s website.

Even as amended, the initial concept of the bill still concerns AFP. The bill’s focus was originally on the disclosure of administrative overhead expenses. It is a misnomer that administrative costs, including fundraising costs, as well as administrative cost ratios, are indicative of a charitable organization’s effectiveness.

Some extremely effective and efficient organizations might periodically have higher administrative costs for a variety of reasons, including the integration of innovative fundraising approaches that might result in a strong return on investment. Similarly, organizations whose missions may be narrowly tailored and/or sometimes unpopular might have higher administrative costs compared to more conventional and mainstream charities who find it relatively easier to raise funds.

Administrative costs are integral to good stewardship of funds and resources and regulatory compliance, and are equally necessary in furthering an organization’s charitable mission.

A wealth of information about charities currently exists. The IRS Form 990 is already available to the public, and the California Attorney General's office maintains a public Registry of Charities that provides information about whether a nonprofit is complying with state rules.

AFP urges its members in California to contact their Assemblymembers and urge them to oppose AB 2855. The template communication below can be changed and personalized for each member.

 


 

TEMPLATE COMMUNICATION

Dear Assemblymember [INSERT LAST NAME]:

As the [TITLE] of the [ORGANIZATION NAME] and member of the Association of Fundraising Professionals [CHAPTER NAME], I am writing to express my concerns about Assembly Bill 2855.

AB 2855 would require any solicitation document produced by a charity (regardless of size) to include the address for the state Attorney General’s website containing information about consumer rights and protections and charity research resources. The charity’s website also would need to be revised to include a link to the Attorney General’s website.

The cost to revising and reprinting these charities’ materials and altering their websites is significant and will increase charities’ administrative costs, leading to less money spent on programs and services.

I am concerned about the bill’s scope and impact. Does even a five-dollar contribution trigger this requirement? What positive outcomes will result from this costly change?

But most importantly, AB 2855, as originally conceived, puts a misguided emphasis on overhead and fundraising costs as some sort of indicator of a charity’s effectiveness. Without sufficient investment in overhead, charities are unable to grow their donor base, increase revenue, attract and retain high level talent, and invest for their future growth. This ends up restricting the overall capacity of the charitable sector throughout California, thereby limiting potential impact and future growth.

I hope that you’ll recognize these concerns and oppose this bill. We look forward to working with you and offer our chapter’s services on this issue and any other issues related to fundraising, giving, volunteerism, and philanthropy.

Sincerely,



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