No abstract

Today, many regulators' operations publish information derived from registration and reporting by charitable organizations and commercial fundraising firms. Similar publication is found in a variety of situationsrestaurant sanitation notices and hospital re-infection rates, among many others. Recent scholarship has explored the theory of regulatory disclosure, identifying how required disclosures can influence organizational behavior and potentially improve public welfare. An important feature of this theory is the "action cycle," in which a requirement to disclose information about a process or product shapes consumers' choices, in turn inducing suppliers to modify their behavior in a desired direction. In this paper, we sketch briefly three widespread approaches that have at different times characterized the regulators' efforts, describe some of the inherent difficulties that regulators, whether independent or governmental, will encounter in connection with charitable activities, and explore the potential for constraining or eliminating abusive practices by required public disclosure of related information.

In the USA, the regulatory framework for fundraising by charitable organizations has been described as a "50-state mix of fees, registration, auditing, and financial reporting requirements" (Irvin 2005, "State Regulation of Nonprofit Organizations: Accountability Regardless of Outcome." Nonprofit and Voluntary Sector Quarterly 34 (2):161-178). However, little is known about how differences in state fundraising regulations might affect the ability of organizations to raise funds from donors. State charities regulation is intended to cultivate an environment that incentivizes giving and reduces fraud, where donor dollars are maximized for the mission to which they are given. Whether current charitable solicitation regulations actually succeed or impede this regulatory goal is the subject of this paper. For this research, we create an index of fundraising regulatory breadth, based on the presence or absence of key components of state charitable solicitation regulations. We use a nationally representative, longitudinal database to examine the impact of state fundraising regulations on fundraising performance. The database, which contains details of over 110 million gift transactions recorded by charities between 2006 and 2016, permits the creation of several organization-level metrics used by professional fundraisers. These metrics serve as dependent variables in multivariate models, where the control variables characterize the charitable environment of the states where the organizations are located. Although space does not permit a complete description of our results, we suggest that further research will add to the understanding of how to construct effective regulation of these and other transactions. The analysis compares statelevel measures of fundraising performance, which summarize the organization- The results of the analysis suggest that organizations tend to have lower values for these fundraising metrics, controlling for the characteristics of the state's charitable environment, in states that have more robust regulatory regimes (where more activities are covered). However, these results appear to be largely a result of the influence of those states where both (1) regulatory breadth is greater and (2) the oversight system is bifurcated: that is, oversight of fundraising is located in both the state attorney general's office and another state agency, such as a secretary of state's office.

No abstract

During the first half of the 20th century, many of the techniques of modern fundraising were developed. During these decades, fundraising demonstrated its potential for supporting important community goals, financing efforts to combat dread diseases, and initiating change in public policies. In this same span of years, community leaders, journalists, and policy makers became increasingly concerned with growing opportunities for inefficient or even downright dishonest fundraising. Local governments, federated fundraising organizers, and nonprofit charity ratings agencies attempted to forestall abuses of the public's generosity. Further, during the Second World War, the federal government imposed significant controls on fundraising for war-related activities. The year 1954 saw the passage of new laws in two states that anticipated the most common form of charitable solicitations regulation in the second half of the century, a form that is widespread today. This paper traces developments from the end of the 19th century to show how the ground was prepared for post-war efforts by state governments to regulate charitable fundraising.