NJ Fundraising Rule Has National Implications

from The NonProfit Times:

NJ Fundraising Rule Has National Implications

Considering a mandatory donor designation disclosure, the New Jersey Division of Consumer Affairs (NJDCA), is seeking public comment on a “pre-proposal” that would have organizations provide a mechanism for donors to designate funds to specific programs.

According to the proposed rule under N.J.A.C. 13:48-11.2, in the June 6, 2011, New Jersey Register the NJDCA believes that “if particular programs are the inducement for a donor to make a contribution to the charity, the donor should be advised that he or she has the option to direct the charity to use his or her contribution to fund that program.”

Furthering the call for transparency among nonprofit organizations, the proposed amendment stipulates that any nonprofit that receives more than $250,000 in its previous fiscal year, shall include a designation allowing donors to choose where their money is going.

… Linda Czipo, executive director of the Center for Non-Profits in New Brunswick, N.J., wrote that along with organizations providing with designations already as common practice, the pre-proposal does raise some concerns.

“Although donors always have the option of restricting their gifts,” she wrote, “the regulations would go further by effectively encouraging donors to do so, thereby reducing available funds for general operations, overhead or organizational flexibility to respond to unanticipated community needs.”

Also, the passage would require administrative costs such as printing, fund allocation and bookkeeping, a potential expensive expense for some smaller organizations.