Nebraska Repeals Solicitation Law
The bad news is that a state senator wants to re-regulate nonprofit solicitation. State Senator Dianna R. Schimek, of Lincoln, Nebraska (District 42), a former chair of the Nebraska Democratic Party, has introduced legislation (Legislative Bill 383) that would again require every nonprofit soliciting in the state to register.
According to Janet Anderson, an aide to State Senator Schimek, the purpose of re-registration is to "keep track of solicitors." However, the Nebraska registration law (still in effect until February 28, 1997) provides no real benefits to donors. FSC called the Nebraska Secretary of State to ask what information they had on certain nonprofits. In every instance, the only information disclosed was whether the nonprofit had registered with the state. Moreover, Ms. Anderson could not identify a single incident in which registration information had been used to prosecute fraud. Ms. Anderson said that she did not know what financial impact the proposed regulations would have on nonprofits. She further told FSC that she had "no intention" of learning what adverse impact registration would have on a nonprofit. However, Ms. Anderson promised to have Senator Schimek telephone FSC to explain why she believes the legislation is necessary. Despite two reminder calls to her office, Senator Schimek has not yet responded.
FSC members and friends should contact Nebraska officials (see below) and explain how state registration of charitable solicitation is unnecessary, expensive to administer, and wastes the scarce resources that donors give to nonprofits. The information that Sen. Schimek seeks to compile (and force nonprofits to provide) is already available to the public in a number of ways:
Call the nonprofit directly and ask for a copy of their Federal Tax Return Section 1313 of the Taxpayer Bill of Rights 2 (Public Law 104-168, effective July 30, 1996) requires nonprofits to provide copies of their IRS Form 990 to any individual who asks (previously, nonprofits only had to allow inspection). Individuals who come to a nonprofit's office in person must be provided a copy "immediately." Requests in writing must be fulfilled within 30 days.
Search the internet for a nonprofits' web site and/or other information.
Many nonprofits, as well as those who support and oppose them, maintain detailed information on the nonprofit's mission, purpose and finances.
If a prospective donor can't find the information they need, they can choose not to give. Ultimately, no amount of information may be sufficient to convince a prospective donor on a nonprofit's worthiness.
Diverting nonprofits' resources to comply with meaningless registration, and having over 40 state governments warehouse the same information, serves no purpose.
FSC members should write, call, fax or email members of the (unicameral) Nebraska Legislature and the Governor and tell them to leave nonprofits alone. L.B. 383 has been referred to the Committee on Judiciary chaired by Senator Kermit Brashear of Omaha, coincidentally a former chairman of the Nebraska Republican Party.
Senator Kermit Brashear
Chairman, Committee on Judiciary
Room 1515, State Capitol, Lincoln, NE 68509
tel. (402) 471-2621
Governor E. Benjamin Nelson
U.S. House Requires Truth in Testimony
The rule, Section 10 of House Resolution 5, applies both to nonprofit groups that receive grants and businesses that have government contracts.
Noncompliance with the rule allows a chairman to hear objections "to including the witness' written testimony in the hearing record," according to the Congressional Record.
Committee chairmen are to require
disclosure to the extent "practicable" from any
nongovernmental witness "to the extent that such information
is relevant to the subject matter." According to Dave Mason,
a senior fellow with the Heritage Foundation who worked to
establish the rule, the measure should not preclude or
hinder anyone from testifying. Moreover, he told FSC that
"testimony by government grant recipients is a necessary
part of the hearing process. If a witness doesn't know if
their grant is relevant to the issue before the committee,
they should disclose it and let committee members evaluate
the value of the information."
Menendez Bill Would Limit Nonprofits
In a statement before the U.S. House,
Congressman Menendez said, "Given the current events
[apparently Speaker Gingrich's House Rules
Violation], we need greater accountability by tax exempt
organizations because they control substantial 'public
wealth' and offer temptation that some have been unable to
resist manipulation [sic]." FSC opposes H.R. 239 in
that it contains unnecessary and restrictive burdens on
Hearings a Prelude to Punishing Nonprofits
Free speech supporters should contact
Congresswoman Johnson and express their opposition to any
legislation that takes away a nonprofit's tax status simply
because it exercises its First Amendment rights.
Congresswoman Johnson can be reached at: 343 Cannon House
Office Building, Washington, D.C. 20515, tel: (202) 225-4476
fax: (202) 225-4488.
McIntosh Bill Would Close Loophole in
Lobbying Disclosure Act
FSDEF Rescues Christian Action Networks
As previously reported in FREE SPEECH, the State of West Virginia successfully sued the Christian Action Network (CAN), an IRC section 501(c)(4) organization incorporated in Virginia, seeking a court order to force CAN's compliance with the state's Charitable Solicitation law. Donations to CAN are not tax-deductible and the organization conducts a vigorous lobbying program. Nevertheless, a state trial court decided that CAN is a charity, because it "is, or holds itself out to be, an educational, religious, philanthropic, benevolent, or patriotic organization." The court also ruled that the state could mandate a government written "disclosure statement" allegedly because it promotes the government's "substantial interests." Finally, the court ruled that the state can force CAN to supply its solicitation materials to the government so they can somehow "ensure" that funds are appropriately spent.
CAN's attorney, David Carroll, Esquire,
presented his case before the West Virginia Supreme Court on
January 22, 1997. A written decision will be forthcoming.
The Free Speech Defense and Education Fund, Inc. is a
501(c)(3) nonprofit. Contributions to FSDEF can be sent to
8180 Greensboro Drive, Suite 1070, McLean, VA