Florida To Tighten Charity Regulations

January 24, 2014       Patrick Sullivan      

Lawmakers in Florida have proposed an overhaul of the state’s charity regulations. Senate bill 638 (S.B. 638) suggests stricter hiring requirements for nonprofits and their solicitors, financial statement submissions, increased penalties for fraud and a database of Florida charities. The House of Representatives version is H.B. 629.

State Sen. Jeff Brandes (R-St. Petersburg) and State Rep. Jim Boyd (R-Bradenton), have proposed the bill, and Commissioner of Agriculture Adam Putnam (whose office regulates charities in the state) has expressed support. “I take my responsibility to safeguard consumers very seriously, and I am committed to cracking down on organizations that mislead consumers in the name of veterans, terminally-ill children and other important causes,” said Putnam via a statement.

Aaron Keller, communications coordinator for Putnam’s office, said the comprehensive, 52-page Senate bill was prompted by an alleged multimillion-dollar charity scam. Employees of Allied Veterans of the World have been accused of pocketing nearly $300 million in Internet gambling proceeds between 2007 and 2012. Some 57 people were arrested last year and are facing criminal charges, and Lt. Governor Jennifer Carroll resigned after being questioned, though she has not been charged.

“The Tampa Bay Times certainly highlighted some of the same issues,” said Keller, referring to an investigation on the 50 worst charities carried out by the newspaper and the Center for Investigative Reporting.

Nonprofit employees and paid solicitors who have violated certain rules in other states would be barred from soliciting funds in Florida. Nonprofits and fundraisers would be prohibited from hiring felons, and professional solicitors would have to submit to background checks and fingerprinting. Telephone scripts would have to be reviewed for accuracy and honesty.

Charities generating more than $500,000 per year would have to submit reviewed financial statements, and those bringing in more than $1 million annually would have to provide the state audited financial statements. Charities earning more than $1 million per year and spending more than 75 percent on administration and other overhead expenses would have to provide a list of board members and family relationships of the board and staff.

“The fact that (the regulations) are going to be updated is good,” said Marina Pavlov, president and CEO of the Florida Association of Nonprofit Organizations (FANO), in Miami Lakes, Fla. But Pavlov is worried that the increased regulation will put financial burden on charities. “Fingerprinting, background checks, people have to pay for all that,” she said. “It seems to me like it’s the solicitors, but that’s just going to increase the costs for nonprofits.” Pavlov predicted that professional fundraisers would pass the new costs on to their clients.

The regulations in the bill would cost $175,000 to implement. Keller said that will exclusively go to the creation of an online charity database. “The intent of that money is to create the website to give Floridians the opportunity to check a charity, their financial information, their board members, so they can make the most informed decisions on where to give their hard-earned money,” he said.

According to Keller, the bills will be introduced in the Florida Senate and House of Representatives in the next 60-day session, which begins on March 1. “Hopefully they’ll move through the legislative bodies, be voted on swiftly and be signed into law by the governor,” he said.