Agriculture Commissioner Adam Putnam on Wednesday will propose “a complete rewrite of Florida’s charity laws,” aiming to increase state oversight and transparency in direct response to investigative reports published last year in the Tampa Bay Times.
Putnam, whose duties include protecting Florida’s consumers, said the changes will help Floridians make more informed choices about the charities they patronize. The legislation will also grant the state additional powers to regulate nonprofits and the professional solicitors who raise money for charities.
“We are introducing a complete rewrite of Florida’s charity laws so that Floridians will be protected from having their hard-earned money go to deceptive charities and Florida will not be a safe haven for bad actors from other states,” Putnam said Tuesday in an exclusive interview with the Herald/Times.
State Rep. Jim Boyd, R-Bradenton, and Sen. Jeff Brandes, R-St. Petersburg, will sponsor the bills and have been working with Putnam for months. The “America’s Worst Charities” investigation by the Times and The Center for Investigative Reporting studied thousands of charities that paid for-profit companies to increase donations and highlighted the 50 worst that spent the most on outside fundraising.
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Brandes said he was upset by what he read in the newspaper, especially since many of these organizations were based in Florida. He reached out to Putnam, who agreed to make charities reform one of his priorities for the 2014 session.
The Florida Nonprofit Alliance, a statewide coalition for charities, has endorsed the proposal and provided input.
Current law requires charities to register with the state but not much else, Putnam said. The proposed legislation is sweeping; a draft version is 52 pages long. Among the proposals:
• All charities must continue to register with the state but will have to provide additional information, like the names of those in leadership positions, contact information and financial reports.
• The state’s Division of Consumer Services will create an interactive database on its 800helpfla.com website to list information about each nonprofit, including any violations of state law.
• Charities that collect more than $1 million a year in donations will have to provide audited financial reports.
• Nonprofits that receive more than $1 million but spend less than 25 percent on programming will have even more requirements: disclosures about employee salaries, fundraising expenses and details of family relationships with any business partners.
• Organizations that collect less than $25,000 a year or that claim religious, education or government exemptions will face less stringent requirements but must still register.
• The state will have the right to ban organizations from operating in Florida if they are found in violation of regulations in other states.
• Charities that emerge as a direct result of a natural disaster or tragedy and raise more than $100,000 will have to submit quarterly financial statements that outline how money is spent.
The proposed legislation also creates new oversight of professional solicitors that usually raise money over the telephone and often pocket much more of their haul than they give to their nonprofit clients.
The measure would require these fundraisers, who mostly collect money over the telephone, to meet similar requirements as telemarketers. They must pay a $100 licensing fee and submit fingerprints for background checks. People convicted of theft or fraud will be barred from working as professional solicitors.
Ted Granger, president of the United Way of Florida that coordinates activities of 32 chapters across the state, said he was glad to see the proposals to address conflicts of interest between some charities and professional fundraisers and the huge uptick in fundraising that occurs whenever there is a disaster.
“The commissioner has been very receptive to making sure that while this bill does embrace higher scrutiny and reporting that it doesn’t become a bureaucratic challenge for legitimate charities,” said Granger, who sits on the Florida Nonprofit Alliance board.
The measures boost fines for violations of state regulations from $1,000 to $5,000 or even $10,000 in some cases. The state would allocate $175,000 to Putnam’s office to help implement the new rules, which would take effect July 1 if approved by the Legislature and Gov. Rick Scott.
Rena Coughlin, chief executive officer of the Nonprofit Center of Northeast Florida, said the colleagues she has spoken with welcome these reforms as a necessary step to protecting the integrity of the whole industry. Charities rely on the trust of donors who write checks and give away cash believing that the money will be used as intended, Coughlin said. “When bad actors erode that trust, that is definitely not in the nonprofit sector’s interest.”