Monday, October 11, 2010

A Fundraising Cost Charities Can't Control

Charities that solicit contributions from the public are required to register in every state that has such laws mandating registration (not all do). Not only are the initial and renewal registration processes oftentimes cumbersome and intrusive--in some states the fees have become absolutely outrageous!

And we know this firsthand. Charity Navigator is registered in 34 states and, thus far this year, we have paid close to $3,300 in registration fees. Before the year is out, we will have forked over close to $4,500 in fees and spent countless man hours of valuable time filling out redundant renewal registrations. We know the states have good intentions and want to protect their citizens from unscrupulous operators but there has to be a better, more efficient way!

We feel the time has come to fully "nationalize" this process by having charities complete a single registration form that is good for all states. A Uniform Registration Statement does exist, but not all states accept it and even those that do still have their own individual financial reporting requirements in addition to the URS. If a truly integrated national system was adopted, individual states could still collect their fees, but they could be significantly reduced as they would no longer need dedicated office staff to administer these unwieldy programs. That's more money in charities' coffers to spend on services that help people and communities--dollars would go where they are needed and not into state treasuries! We'd love to know what you think--please leave a comment.

1 comment :

Tony said...

Yes, a standard system of registration--like that in England and Wales--would relieve nonprofits of an enormous administrative burden. I don't believe it would reduce the state bureaucracies, however. Those would still be in place to review the standardized form, and so I don't see fees coming down. The great savings would be in staff time on the charity side.

Even with a standardized form that all 51 jurisdictions accept (D.C. has its own rules), the state's personalities will still emerge. There will still be a fair degree variation in what the states require to accompany a truly uniform form.

The current Unified Registration Statement, or URS, is a misnomer. It's more of a FRS, where the "F" is for Fractured. It could be for something else, synonymous with "screwed up" but that's not suitable for print.

Good luck to Charity Navigator with the rest of your registrations. I know very well the morass you're mired in.