MARCH 2017

STATE LAW

Florida

The state has elected not to retry the lawyer who was previously convicted of running a $300 million gambling ring using internet cafes operated by a veterans’ nonprofit organization. The appeals court ordered a new trial and the state has declined to prosecute.

Massachusetts

The Boston Globe reports criticism of the outgoing president and CEO of the National Fire Protection Association who left the organization with a $4.1 million exit package. The former CEO is also a former democratic congressman and State Attorney General who earned more than $10.5 million in 12 years as president of the nonprofit. Likewise, the CFO reportedly earned over $1 million in 2014. The organization, itself, is a recognized leader in creating standards for fire safety and is sitting on a surplus in excess of $200 million. Still, industry officials have criticized the organization’s generous packages for its key employees.

Missouri

The campaign treasurer for the successful campaign of Eric Greiten to be elected governor of the state has formed a new nonprofit organization called “A New Missouri, Inc.” While its stated purpose is to promote ideas of general benefit to the state, according to published reports, its purpose will be to advocate for the governor and his agenda. Because it is a nonprofit organization, it can accept unlimited contributions and will not be required to disclose who is giving money.

Commentary: This is the same governor elect who, according to other published reports, benefited from millions in dark money contributions and who refused to disclose how much corporations paid for his own inauguration.

North Dakota

The president of the board of directors for the Charitable Gaming Association of North Dakota is criticizing a legislative proposal that would pave the way for six state-owned casinos. The fear is that state-run casinos would take a large portion of the gaming profits from many of the state-based charities that rely on gaming activities to support their programs.

Ohio

The Attorney General has announced a settlement with a former clergyman who previously lived in Steubenville and who is accused of creating and using a charity primarily to pay for personal expenses. The defendant is now a resident of Sherman Oaks, California and was subject to a lawsuit accusing him of multiple violations of the state’s charitable laws. The settlement requires $26,519.00 in restitution to be redistributed for the charitable purposes of helping child refugees.

The city of Cincinnati is setting up a recycling program whereby residents can recycle used clothing. The city has entered into a contract with a for-profit service that will pay the city $0.01 for every pound of materials collected. The concern is that this program may destroy the programs of many charitable organizations that solicit the donation of used clothing and other household items.

Pennsylvania

The Department of State has issued a press release announcing the filing of disciplinary actions against eight charitable organizations, professional solicitors, and professional fundraising counsel during the month of February. The press release notes that these organizations may not fundraise until they come into compliance with the state Charitable Solicitation Act.

Texas

A former Texas congressman has been charged with diverting $350,000 that he solicited for a nonprofit. The charge alleges that he used the money for personal and political purposes.

Wisconsin

Police in Fox Crossings have alleged that two men stole nearly 1,800 cases of diapers from a nonprofit in a local area that provides assistance to families in need. The theft is valued at over $45,000.

OTHER MATTERS

Charities v. Government: Foreign Aid

The Center for Global Prosperity at the Hudson Institute reports that non-government institutions provided $43.9 billion in aid to developing countries in 2014 as compared to $33.1 billion from the U.S. Government.

Commentary: This may be the first time in history that NGO’s have surpassed the government’s work in helping those in need in foreign lands.

India

A number of religiously based organizations have found that they are no longer welcome in the country. Christian-based organizations seem to be one of the major targets in the otherwise Hindu country. Authorities in the country have accused various charities of not disclosing where their donations have been spent to engaging in “anti-national” activities. The charities, as a group, respond by saying the crackdown has been aimed at curbing dissent and reducing the rights of minorities. Over 10,000 charities have lost their license to receive or donate foreign funds in the country since 2014.

New Zealand

A recent report entitled “The Shape of the Charity Sector” indicates that there are 114,000 charities in the country. However, of that number, only 27,380 are registered with the government. The report estimates that the combined assets of all of these charities represent approximately $40 billion.

PayPal Lawsuit

A lawsuit was filed in federal court in the Northern District of Illinois earlier this month by a nonprofit and a donor against PayPal, Inc., a Delaware corporation, and PayPal Charitable Giving Fund, a Delaware nonprofit corporation. The lawsuit alleges that PayPal established a new platform in 2013 for customers of the site to donate to their favorite tax exempt organizations. At the same time, PayPal created its own nonprofit organization to process and distribute the donations. The lawsuit alleges that not all of the nonprofit charities on the site received their donations. If you are a charitable organization, you may hear about this case because it has been filed as a class action.