Tierney Blog

A Sophisticated Platform for Anti-Fraud Efforts in the Nonprofit Sphere

Media across the country have carried the story of how all 50 state attorneys general and the Federal Trade Commission came together to crack down on organizations perpetrating fraud against our veterans. This well-coordinated effort, Operation Donate with Honor, is not only a success in and of itself. It also reveals an expanding and sophisticated platform for future anti-fraud efforts in the nonprofit sphere.

The result of years of painstaking work by career prosecutors on both the state and federal level, this initiative highlights the efforts of the National Association of State Charity Officials (NASCO).  A regular visit to NASCO's improved website is in order for anyone interested in nonprofit fraud prosecutions

Traditional AG Work Continues

Ma. AG Maura Healey is opposing efforts by a small museum in western part of her state from selling off two Norman Rockwell paintings. I post this as a reminder that for all of the national attention to the opioid epidemic, pharmaceutical price fixing, and either suing the Trump administration or filling the enforcement void left by federal retrenchment, attorneys general are still back home doing their in-state jobs. And we are talking Norman Rockwell here! 


More Resources Needed for State Charities Oversight

Few reports have impacted the non-profit sector more than last month's State Regulation and Enforcement in the Charitable Sector report, authored by Cindy Lott.  In short, the paucity of state government resources dedicated to effective regulation is stark. For example, the research confirmed that "most state charity offices have few staff to conduct their work and carry out their responsibilities." More than half of the reporting jurisdictions have less than three full-time equivalent employees. Staff includes attorneys and non-attorney staff, such as investigators, accountants and support staff. In addition, 13 jurisdictions have a stand-alone state attorney general’s charities bureau, while 14 jurisdictions house the charities unit within their AG’s consumer protection division.

Those states that are active are attending this year’s National Association of State Charity Officials (NASCO) meeting in Washington D.C. (Oct 17-19), where this report will be discussed. The National Association of Attorneys General (NAAG), which co-hosts this annual conference, is wisely appointing a permanent committee to discuss non-profit governance at the attorney general level. Let's hope that attorneys general dramatically increase the resources devoted to this critical area.

See: NAAG/NASCO Annual Meeting

See: State Regulation and Enforcement in the Charitable Sector Report

A Game Changing Report

Although almost all attorneys general have jurisdiction over the regulation of non-profit organizations, there has always been a lack of data as to the resources they and other state regulators have at their disposal and what they actually do. Last month, under the leadership of Cindy Lott — now the Program Director of Nonprofit Management Programs at Columbia University, a Senior Fellow at the Urban Institute’s Center in Nonprofits and Philanthropy, and for ten years the Counsel to the National State Attorneys General Program at Columbia Law School - the public now has a fifty state survey of jurisdiction, staffing levels and output.  

The Report describes the organization and staffing of state charity offices from one state to another. I strongly recommend to anyone who cares about the governance of the non-profit sector that they download and read this Report.  I also urge readers to review the media response and this in depth interview with Cindy Lott.  This Report could be the long awaited game changer.


State Regulation and Enforcement in the Charitable Sector

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