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More Bad News on the Horizon: The Protection of Charitable Assets Act

Posted June 22, 2011

A model state law from the Uniform Law Commission (ULC) affecting nonprofits AND religious organizations is up for consideration at the ULC’s annual meeting in Vail, Colorado, July 7 – 13.

The Protection of Charitable Assets Act (POCAA) would create yet another registration requirement for nonprofits.  It’s more paperwork going into a bureaucratic black hole that won’t help protect donors, will add costs for nonprofits, and will create more taxpayer-funded bureaucracy.

If that’s not bad enough, POCAA is ripe for abuse by state regulators.  It would allow them to target unpopular nonprofits for investigations that don’t comply with the Fourth Amendment protections against unreasonable searches and seizures.  Charity regulators will be able to snoop into the affairs of nonprofits and religious organizations without the procedural protections of warrants issued after oath and affirmation, and only upon probable cause.

POCAA has First Amendment problems because charity regulators, not known for their constitutional compliance, can target critics of government.  Also, POCAA seems to have major church-state separation issues.

When informed of the potential for such abuse by government officials, the POCAA drafting committee wrote:

Some observers expressed concern that an [Attorney General] might use the power of investigation for political purposes.  While the risk of misfeasance exists with any power, the Drafting Committee concluded that it could not make decisions based on an assumption or a possibility that a state official would misuse authority provided in the Act.

Drafting POCAA assuming state regulators won’t abuse their authority merely invites abuse.

For a great summary of where things stand from both sides of the debate, read Protection of Charitable Assets Act On Agenda For Uniform Law Group in The NonProfit Times.

I’ve written several articles explaining why this is a bad law, and you can find the links in the Articles section on the homepage.

You may want to write the governor and attorney general of your state urging them to instruct their state representatives to the ULC to vote against adoption of POCAA.  I’ve provided a sample letter at the Take Action Here section on the homepage.  Feel free to use it.

 


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