From: Xenia "Senny"
Boone, Senior Vice President <SBoone@the-dma.org>
Sent: Wednesday, July 13, 2011
4:51 PM
To: Alicia Osgood
Subject: Act Now -- NJ Rule Would
Compel Nonprofits to Invite Restricted Gifts
Dear Alicia,
Do you want the challenge of raising funds limited to mentioning or
describing only one of your programs in your solicitations OR,
in the alternative, having to invite each and every prospective donor to
make a restricted gift? This is, in effect, what is offered up by a new
rule proposed by the NJ AG’s Office of Consumer Protection. As we see it, it’s
damned if you do, damned if you don’t.
The proposed rule is attached.
It would apply to any organization raising over $250,000 per year and
soliciting from NJ donors. Also attached is a preliminary
analysis prepared by NJ’s Center for Nonprofits. Find updates at
http://www.njnonprofits.org/.
In short, every solicitation will be required to include a notice (the rule
doesn’t say “clear and conspicuous” but you can assume it) advising donors that
they may designate their gifts to any program and/or allocate their gifts among
programs, fundraising expenses, and administrative expenses. The rule
then goes on to stipulate that every reply device must contain the means for
donors to make their designations.
The proposal surely has serious constitutional issues connected to compelled
speech. It is safe to presume, we think, that lawyers practicing in our realm
will raise this point and others. We will too in our comments.
Perhaps the state believes it can dance around the issue. But we can only
assume that the state simply does not understand the costs its rule would
impose. This is where you come in.
What You Should Do
In order to make a strong case against this proposal, we need formal
comments from organizations willing to spend some time to gather good faith
estimates of imposed costs. The weight of responsible opinion, backed by
some credible data will, one can only hope, inform the AG of the cost-benefit
realities of his proposal. No matter how strong the constitutional argument
against the rule, a court case cannot be as quick and inexpensive as persuading
the regulator to withdraw it.
Here are a few elements of compliance costs that occur to us. We offer them
merely to provoke your thinking:
-- In some cases (e.g., NJ-only or regional mailers), destruction of stocks of
non-complying fundraising materials (in the event of insufficient lead-time for
compliance).
-- Re-design of all direct mail materials, telephone scripts, and web
donation pages.
-- Ongoing added cost of gift processing and consequential bookkeeping and
accounting.
-- Possible effect on overall fundraising of choosing one-program
soliciting or presenting the designation scenario (included in the latter is
the likely loss of general-purpose funds).
-- Cost of ongoing increased costs due to (presumed) need to segregate NJ
in regional and national fundraising programs.
We know you have plenty to do without having to spend time on misguided
regulations. But who better to provide the body of evidence we need
than DMANF members? The opportunity to head this off at the pass is now. So,
please invest a little time now to save yourself and your organization a lot of
expense and aggravation later!
Please contact Senny
Boone or Robert Tigner if you have questions or would like
some help with your comments.
Comments must be in writing and must be submitted by August 5
to Thomas R. Calcagni, P.O. Box 45027, Newark, NJ 07101. Calcagni's office
says that comments may be sent by email to askconsumeraffairs@lps.state.nj.us. If sending email, we advise
putting “Comment on Proposed Rule” in the subject line. Finally, please
send copies of letters or emails to Senny and to Linda Czipo at Center for Nonprofits.
Thank you in advance for your efforts,
Xenia "Senny" Boone, Esq.
Senior Vice President
Robert S. Tigner, Esq.
DMANF Regulatory Counsel
1615
L Street, NW — Suite 1100 — Washington, DC 20036
Email: nonprofitfederation@the-dma.org — Web: www.nonprofitfederation.org
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