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California Regionals Oppose Bill on Nonprofit Regulation: Letter

 
 
 
 
 
 
 
 
 
 
 
April 20, 2016
Assembly Member Lorena S. Gonzalez, Chair
Assembly Committee on Appropriations
State Capitol, Room 2114
Sacramento, CA 95814
 

Subject: Assembly Bill 2855 (Frazier) – OPPOSE AS AMENDED

Dear Chairwoman Gonzalez :

On behalf of more than 600 foundations and other philanthropic members of the Northern California Grantmakers (NCG), San Diego Grantmakers (SDG), and Southern California Grantmakers (SCG), we write to urge your “no” on Assembly Bill 2855 (Frazier).

We share the author’s concern about responsibility and accountability in the nonprofit sector. As foundations and philanthropists, we hold the recipients of our grant funds to the highest standards, evaluating how grantees expend funds, the effectiveness of programs, and completeness of Form 990s.

Nonetheless, the bill lacks clarity and precision in its use of “prominent” in describing the location of the website link. Coupled with the requirement to have the Attorney General’s Registry of Charitable Trusts webpage address on every printed solicitation, this bill would result in additional legal consultation and printing costs, contributing to the very issue at that this bill purportedly seeks to rectify.

Additionally, the bill runs counter to efforts by the Obama Administration to educate funders – both public and private – about the need to support indirect costs when making grants. The White House Office of Management and Budget (OMB) put forth a guidance on December 26, 2013 that made clear that a nonprofit’s indirect costs (sometimes called overhead or administrative costs) are legitimate expenses that need to be reimbursed for the organization to be sustainable and effective.

While the bill’s intentions to provide more information consumers is admirable, consumers already have a wealth of accessible information available through search engines such as Google, Bing, and Yahoo. Consumers who search “Form 990 + organization name” would be led to Guide Star, Foundation Center, and other respected national resources that guide consumers to ensure that their dollars effectively go toward responsible organizations. These platforms have low transaction costs for consumers seeking additional information.

Northern California Grantmakers, San Diego Grantmakers, and Southern California Grantmakers are the regional associations for philanthropists and grantmakers working to make a difference in our communities and around the world. As the voice of California philanthropy, we serve as the forum for the exchange of ideas, improve cooperation among foundations, and increase our knowledge of community problems to tackle big issues and achieve shared goals. In 2015, philanthropies contributed over $16 billion to California’s economy by supporting important efforts related to foster care youth, homelessness, afterschool programs, and access to healthcare – among many other critical issues.

For the reasons stated above, we urge your “no” vote when the bill is heard by the Committee. If you have any questions or comments, please contact Seyron Foo, Senior Manager, Public Policy and Government Relations at Southern California Grantmakers at seyron@socalgrantmakers.org or by phone at (213) 680-8866.

Thank you for your consideration.

Sincerely,

 

 

Chris Essel, President and CEO
Southern California Grantmakers
 
 
 

 

 

 

Ellen La Pointe, President and CEO
Northern California Grantmakers

 

 

 

 

Nancy Jamison, President and CEO
San Diego Grantmakers

 

CC: Members, Assembly Committee on Appropriations

Assembly Member Jim Frazier

Chuck Nicol, Deputy Chief Consultant, Assembly Committee on Appropriations

CE:sf