NASCO/NAAG 2021Annual Conference

October 11, 2021

Every year Affinity team members attend the annual NASCO (National Association of State Charity Officials) /NAAG (National Association of Attorneys General) Conference to learn first-hand what the current concerns are for the state regulators, and to further develop our relationships with the charity officials we work with daily.

Oftentimes, this conference is attended by deputy or assistant attorneys general, other department of state staff, and charity officials. This fall, one of the most notable aspects of the conference was the presence of five state attorneys general from Connecticut, Kansas, Nebraska, New Hampshire, and Vermont, signifying that NASCO and the charity regulation field is gaining more significance! Considering the media attention surrounding the recent multi-state litigation of Cancer Fund of America, and the $75.8 million fraud settlement, this makes perfect sense. As the states continue to work together in increasingly unprecedented numbers on enforcement and bring in federal agencies like the FTC as they did with their Cancer Fund case, enforcement should be expected to grow.

One very pertinent theme at the conference was the relationship between regulation and technology. In the wake of the 2015 Freedom of Information lawsuit, all 990s have now been made publicly available through Amazon Web Services. The New York Attorney General's office worked with a programmer to mine 990s for regulation and enforcement endeavors, and actively started identifying and contacting organizations that could be violating the state statutes. Some of the initial search criteria they shared covered loans to officers and directors, political contributions, and diversion of funds to determine potential embezzlement, while cross-referencing against news and press releases.

As the first state to have a charitable solicitation registration law, New York has historically been a trailblazer for regulation and enforcement and is the first, if not only, state to be using the publicly available 990 data to this degree. However, it is reasonable to assume that other states are looking at the precedent New York has set and are considering how they, too, can use this information to further regulate charities in their states, and compel organizations to register.

The for-profit sector is also exploring the open access of the 990, with CitizenAudit.org looking at ways to analyze information across multiple groups, creating visualizations of cross-sections of grantors, grantees, contractors, and more. It's not unreasonable to infer progressive foundations could start using this technology to look at the relationships of those they support, and use it to influence the funding choices they make. Affinity, too, has been developing access to the 990s, and looking at ways for the publicly accessible information to inform our work. Watch for a push at the national level for the IRS to require e-filing of all 990s in coming years.

Additionally, there was a progress report on the Multistate Registration & Filing Portal project. Wireframes of initial pages of the project were shared to provide some long-awaited eye candy! The project has moved into a deep discovery process specific to the regulator's side, uncovering the often tricky realities of registration and regulation among different state offices and learning what implementation might look like among the 13 states that have expressed interest in the project. The initial launch will not cover all 13 states due to the limited technological capacity of many state offices, and at first will likely only cover registration in just a couple states.

The nonprofit sector, meanwhile, is pushing for additional research to be pursued to determine if a higher degree of regulatory enforcement correlates with increased giving (or not).

Time will tell how the MRFP project develops, but Affinity will be watching it and the other initiatives and concerns of the charity officials closely as we continue to support our nonprofit customers with the streamlined process of the Affinity Single Portal.