DOVER – Delawareans will be able to validate charities soliciting in the state before they donate under legislation that is moving through the General Assembly.
House Bill 187, which was drafted by Attorney General Beau Biden’s Consumer Protection Unit and sponsored by Rep. Ed Osienski, Rep. Helene Keeley and Sen. Bryan Townsend, will be considered Wednesday in the House of Representatives’ Economic Development, Banking, Insurance and Commerce Committee.
The measure was drafted with the support of the Delaware Alliance for Non-Profit Advancement and many of the state’s largest charitable organizations.
The bill requires most non-profit and charitable organizations soliciting donations in Delaware to register with the Consumer Protection Unit and annually submit their IRS 990 tax forms as well undergo periodic financial audits, depending on the size of the organization. Additionally, the bill serves to provide oversight of professional fundraisers and solicitors and their associations with charitable organizations.
Biden’s office will maintain a publicly available and searchable database so Delawareans can check to see if a charity is legitimate before donating. The database will also provide additional information about the organization’s charitable purpose and how the organization spends its donated funds.
“There are many wonderful charities in Delaware doing amazing work,” Biden said. “Unfortunately, there are fraud schemes run by criminals who try to prey on Delawareans’ generosity. Our Consumer Protection Unit regularly receives complaints about fraudulent organizations. This bill will give our prosecutors an important new tool to fight fraud.”
Registration fees paid by organizations will fund the database and the necessary Department of Justice staff to maintain the database, monitor the financial audits and pursue violators. The fees range from $10 to $100 depending on the size and type of the organization. Professional fundraisers and solicitors will also have filing fees and certain bonding requirements to provide additional safeguards.
Between 1,000 and 2,500 charitable organizations are expected to be required to register with the state under the bill.
Last year, the IRS reported that one of the most-prevalent fraud schemes of 2013 was charitable fraud.
“There are dozens of charitable organizations that help Delawareans of all walks of life that rely on the generosity of others to continue their good works,” said Rep. Ed Osienski, D-Newark, whose district includes the Food Bank of Delaware. “When someone is considering donating their hard-earned dollars, they should be able to quickly find out whether an organization or cause is legit. This bill is an important tool to fight and root out fraud and allow Delawareans to donate with confidence to charitable groups.”
Supporters believe the new law will give Delawareans increased confidence that the charities they donate to are lawful and making good use of the donations. That increased confidence could lead to increased giving.
Delaware ranks 39th in the country, according to the IRS, in annual charitable donations by its citizens. Organizations exempted from the bill include political organizations, civic associations, religious entities, educational organizations and other groups that are exempt under the IRS Code.
“DANA has worked closely with the Attorney General’s office on the ‘Charitable Solicitation Registration Bill’ since its inception several years ago. They have been very responsive and supportive in finding solutions to the concerns we raised on behalf of the nonprofit sector. We are greatly appreciative of their efforts, and look forward to continuing to work with them on the implementation process once the bill is passed,” said Chris Grundner, President and CEO of Delaware Alliance for Nonprofit Advancement (DANA).
###Related Topics: consumer protection • fraud
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