Charity Trade Groups: the Key to Self-Regulation

To the Editor:

Like most of his contributions, Putnam Barber’s November 5 opinion piece (“Charities Must Lead Push for Unified Regulations”) is thoughtful and eloquent.

Mr. Barber’s premise is that we need to work together for self-regulation in a unified way, rather than the state-by-state, regulator-by-regulator approach now used. I support self-regulation and oppose the state regulation currently in place. Such regulation does little or nothing to stop, or even to prosecute, fraudulent behavior in our sector.

Fraud statutes are already on the books in every state and are used to prosecute those in our sector just as they are used to prosecute those in the for-profit sector. After all, separating someone from their money by fraud is no different if the separator is a non-profit or a person working in a for-profit.

State regulations are a thinly veiled way to raise money for the states from out-of-state organizations, and a way for state A.G.’s — that’s “aspiring governors” — to beef up their “tough on crime, pro-consumer” ratings.

Unfortunately, Mr. Barber is right: Too few of us participate in the process of self-regulation through the National Society of Fund Raising Executives or other trade groups. We need to make our trade groups more popular and more effective.

Rick Christ
Vice-President
Target Advertising
Manassas, Va.

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To the Editor:

Unified reporting has come a long way in the last 15 years, but I agree it should be better. The Internal Revenue Service’s Form 990, if carefully examined, is a pretty straightforward document. The accounting profession and a number of states have a unified report.

A step to correct the ignoring of standard accounting rules by non-profit leadership would be to demand that independent accountants sign the 990. I also believe that outside fund-raising counsel should be required to sign the 990.

The future of public accountability will be to encourage the contributor to take advantage of new I.R.S. rules and request a public copy of the 990. Once there is the demand for public disclosure, in the same way that public companies must provide information to their shareholders, accountability by non-profits will finally achieve the result of the simple objective of “the public’s right to know.”

Bill White
Los Angeles

The writer is a former vice-president of the National Charities Information Bureau.