Part 2 of “America’s Worst Charities” focuses on regulation

Lack of regulation and meager penalties allow worst charities to thrive is the second part of an ongoing series from the Tampa Bay Times and Center for Investigative Reporting. Part 3 expected in a week.

If I were to summarize a several thousand word article, the main point would likely be the patchwork of federal and state regulatory structure has a difficult time chasing bad players out of the telemarketing business.

The reporters accumulated data from over 8,000 enforcement actions. From that database, here is are two comments on what I’ve referred to as bad players:

• More than 35 charities and their hired solicitors have been caught breaking the rules multiple times but continue to take money from donors. The most frequent violators have been cited five times or more. One solicitor has been cited 31 times and is still in business.

• Bans issued by state regulators are meaningless. Over the past decade, at least a dozen solicitation companies and charities have been forced out of one state only to continue raising donations elsewhere.

Another observation from the article.

Eight of the 50 have been banned in at least one state but continue collecting donations elsewhere.

How do we deal with outliers?

One of many thoughts from this article is how do we as a society deal with the extreme outliers? Those are the extremes in any population. You know, the people who give the honest players a bad name.

I’m aware of CPAs who are way outside the professional bounds, possible out in illegal land. I’m aware from reading and talking to people that there are charities that are way out of line. I’m aware of pastors and churches that make all Christians look bad.

And now we have a list of telemarketers and charities that make honest telemarketers and the other one point whatever million charities look horrible. How do we deal with the extremes without harming the 99.9+% who try really hard to follow the rules?

This article doesn’t apply very much to the religious nonprofit sector. Still, it would be worth your time to read the article, because I think this series of articles will have a big impact.

Here is a blog post at The Center for Investigative Reporting giving some background on the cooperation between the three newsrooms.

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