The Colorado Nonprofit Association supports the efforts of the Attorney General and Secretary of State to enforce charity regulations against those who undermine public trust in our nonprofit community by committing charitable fraud or failing to act with transparency and accountability. - Renny Fagan, President and CEO
On January 11, 2017, the Denver Post published a guest commentary by Colorado Nonprofit Association President and CEO Renny Fagan regarding the importance of enforcing the laws against charitable fraud. The article also highlighted collaborations between the Association, the Secretary of State's office, and the Attorney General to prevent fraud and enhance nonprofit transparency.
The commentary responded to an article and editorial in the Post regarding the Attorney General's FY 2017-2018 budgetary request for $350,000 for a unit to oversee charities and protect charitable assets.
- Jan. 4 editorial: "Let's Prosecute Bad-actors pretending to be Do-gooders"
- Dec. 29 article: "Sudden Growth in Charities has Colorado Attorney General Seeking New Oversight Unit"
The Colorado Attorney General's (AG) office enforces laws in Colorado to prevent charitable fraud and ensure charitable assets are used for their intended purposes. Currently, charity fraud cases are handled by the consumer fraud unit.
The requested funding would support two full-time attorneys, an investigator, a paralegal, a office manager, and other operating costs. The Department of Law argues that a Charities Unit is needed because:
- The AG is vested with authority over all charitable assets in the state under common law.
- According to the Internal Revenue Service, there are over 23,000 501(c)(3) organizations listed in Colorado, but as of late DOL has no staff dedicated full-time to charity oversight.
- Activity requiring DOL review in this sector has dramatically increased, specifically in respect to nonprofit to for-profit conversions in the healthcare sector.
- Colorado is one of 14 pilot states involved in the Single Portal Multi State Registration Project, which will allow charities that solicit in multiple states to only be required to register in one state. This program will be digitized, allowing for better analysis and earlier detection of possible charitable fraud. Therefore, DOL will have better access to data regarding charities, but currently lacks adequate personnel to pursue appropriate enforcement actions.
The Joint Budget Committee held a December hearing on the budget request and will continue to review the request. We encourage you to contact the Joint Budget Committee if you have feedback to share regarding the possible new unit or contact Mark Turner, our Senior Director of Public Policy, with any questions or concerns.