In order to operate, non-profit organizations rely heavily on the ability to fundraise. The government leaves the regulation of that “charitable solicitation” to individual states, with most requiring formal registration to engage in such activities. With firms vying for organizations’ business to hire consultants to obtain funds, and ethics and oversight firms highlighting the careful approaches that must be utilized to appropriately raise funds for non-profit operations, charitable organizations may find themselves confused and threatened in the space between needing charitable solicitation to survive and maintaining regulatory compliance to engage in the activity itself. While the threats of penalties and sanctions are large and imposing, it appears that few organizations ever face their true weight. Charitable organizations must, of course, comply with each state of registration, but is the fear instilled equal to the reality of the consequences of non-compliance?
Since the enactment of the Affordable Care Act, hospitals have faced strict and substantial regulations regarding the provision of financial assistance to patients in the form of “charity care.” An essential element in a hospital’s ability to maintain tax-exempt status and financial solvency, charity care has worked to serve uninsured and indigent patients while helping charitable hospitals serve their mission and retain the benefits that come with it. The state of Pennsylvania recently passed legislation requiring more explicit and affirmative acts to provide charity care to more eligible patients. The change is unprecedented, and other states look to be slowly responding in their own ways. Compliance with these changes is most beneficial with proactive measures and risk assessments even before change comes through the doors.