Tuesday, November 9, 2010

Eisenberg: State and Federal Regulators Must Do More to Police Nonprofits

Pablo Eisenberg (Georgetown) has written a column for the Chronicle of Philanthropy (subscription required) calling for both more resources - funding and staff - for the IRS and state charity offices and greater political will and courage to go after politically powerful nonprofits.  Unfortunately, this call is likely to fall on deaf ears for at least reasons.

First, such calls have been made by everyone from academics to members of Congress for decades, yet have been met with only modest (if any) response at either the federal or state level.  To see how little has changed, one need only look at the concluding chapter of Marion Fremont-Smith's landmark 1965 book Foundations and Government, where she makes recommendations for improving federal and state regulation of nonprofits that will sound eerily familiar.  While some of the problems she identifies have been addressed in the intervening 45 years, many of them have not, particularly with respect to enforcing the legal rules governing nonprofits and especially charities.

Second, as the plight of the Charity Commission in the UK highlights (see separate blog post on that topic), budget pressures at both the federal and state level as well as competing policy priorities such as the economy and the ongoing wars make it unlikely that members of Congress will heed Eisenberg's call.  More thought may therefore need to be given to how to improve enforcement without either additional financial resources or greater political attention.



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