State Regulators Abuse Charities’ Rights

To the Editor:

There are other, more critical views of Pennsylvania’s charity bureau than the fawning, one-sided portrayal in the November 15 issue (“Nonprofit Abuse Sleuths”).

If the standard by which to judge the quality of government bureaucrats is the number of complaints received from those who are “upset by steps taken” by those bureaucrats, as the article suggests, then Jefferson should be revised to say “government which governs best governs most offensively.”

The article shows what the Free Speech Coalition has learned in representing nonprofits against regulators for 13 years: that state regulators view the U.S. Constitution, particularly the First Amendment, as a nuisance.

Indeed, the U.S. Supreme Court has held on multiple occasions that the First Amendment protects nonprofit solicitations because they are intertwined with educational, informative, and persuasive information. Few charities can raise money without the expense of explaining to potential donors the need in an intelligible way, and within a small window of time and attention.

Therefore, the Supreme Court has held repeatedly that costs of fund-raising communications are not a measure of fraud. That is a thorn in the side of many regulators who believe their job is to tell people what is best for them.

Of course, politicians, who often compete with nonprofits for contributions, using the same fund-raising methods, write these laws to regulate nonprofits and then exempt political committees from those laws.

And don’t forget that some of the most outspoken critics of government abuse and corruption come from the nonprofit sector, thus giving elected officials more self-serving motivation to impede those nonprofits.

Could you imagine politicians applying the same standards of fund-raising costs and honesty to their own fund-raising methods, including giving state regulators the authority to prevent those politicians from fund raising?

The article states, “Bureau leaders say they often are unable to rein in charities that collect lots of money but do little good.”

Oh? In whose opinion? When did the government become the censor of speech by nonprofit organizations? And how about applying that same principle to political fund raising?

The Chronicle’s article fails to provide what many of us know to be the better context.

Actual fraud should be prosecuted by prosecutors. State charity officials accomplish nothing except harm when they require nonprofits to divert resources from program to compliance costs.

Too often, state regulators ignore fundamental constitutional rights of speech, the press, and association. Notions such as due process of law and the separation of powers are foreign concepts to many of them. Indeed, fines should never be imposed by bureaucrats funding their own budgets, only by judges. Therein lies a serious problem.

The Pennsylvania law that the bureau enforces violates a long line of Supreme Court decisions going back to the civil-rights marches of the 1950s ruling that any time a licensing requirement is imposed that may impinge on First Amendment rights, the licensing authorities must not be given discretion to demand conditions, and thereby deny licenses to those who fail to comply.

Unfortunately, the article speaks of “curbing charity fraud,” but we still can’t tell whether the Pennsylvania bureau is focused more on fraud than increasing the size (and funding) of itself. A quick review of the agency’s enforcement actions since 2000 shows that nearly 90 percent of its enforcement actions were for purely administrative deficiencies, but they resulted in fines and fees totaling over $580,000 from just over 100 nonprofit agencies or their fund-raising support teams.

Notwithstanding this article’s portrayal of state charity officials as the protectors of all that is righteous and good, the fact remains that these same officials have abused the rights of nonprofits and their fund-raising support teams while imposing enormous unnecessary compliance costs on nonprofit organizations.

Richard B. Dingman
Senior Counsel
Free Speech Coalition
McLean, Va.