A recently published model law would change the relationship of state governments to private charity and religion in a very fundamental and unconstitutional way.
The model Protection of Charitable Assets Act — which is being promoted by the National Association of State Charity Officials — represents a state power grab of poorly defined discretion over the property rights of private charities, churches, and even the estates of the deceased. It is special interest legislation for increasing bureaucratic power.
POCAA would require registration of groups or entities with charitable assets over $50,000. Government agencies and instrumentalities, however, are exempt from reporting and coverage. That includes government-run charities endowed by business cronies courting favor with politicians. Also exempt are state university charitable programs, such as the Charitable Gift Fund at recently troubled Penn State. Such government creations are considered more trustworthy than religious groups, for whom the model law only creates optional exemptions.
POCAA gives state regulators unilateral authority to intrude by claiming a “public interest” in private charitable or religious assets. That phrase, which was specifically debated during POCAA’s drafting, is vitally important. “On behalf of the public” would have given state attorneys general legal standing to litigate when charitable assets might be misused. But with the words “in the public interest,” POCAA misconstrues this authority, giving the state a larger say in charities’ activities. It also extends this authority to other state officials who are not attorneys general or even attorneys. This makes POCAA even more ripe for unqualified and subjective interpretations.
For example, state charity regulators could conclude that it is in the public interest for the Boy Scouts to admit gay scout leaders, or to make religious charities hire outside their denominations. Conservative regulators could use the “public interest” standard to direct the workings of organizations like Planned Parenthood. That courts may later find misuse of the public interest standard, but in the meantime there would be crushing costs that many struggling charities cannot afford. The least-endowed would be the easiest targets. A cleaner, better-defined law would prevent that.
Furthermore, POCAA eliminates Fourth Amendment protections against unreasonable search and seizure of charitable and religious property. The Fourth Amendment requires that administrative investigations commence only when there is probable cause — a standard not easy to define, but clearly more stringent than the standard of “reason to believe” used in POCAA.
What’s especially troublesome is how this disregard for Fourth Amendment rights came to be. NASCO is comprised of officials ranging from attorneys general and secretaries of state through others who license businesses such as liquor stores and hairdressers. The law they are pushing was first drafted and adopted by a body called the Uniform Law Commission, which consists mostly of private attorneys appointed by the 50 states. This august commission took sides with big government, and their colleagues will benefit defending clients when government officials use the law to violate rights.
In addition to violating the rights of charities and religion, POCAA requires that estates making testamentary gifts file copies of wills and estate inventories — showing everything from land holdings down to the tea pots — with these busybody charity regulators. POCAA requires public disclosure of filings, and fails to prohibit bureaucrats from posting estate information online.
POCAA is a turkey, and cash-strapped states can ill afford such unwise and unlawful power-grabs.
Mark J. Fitzgibbons’ blog is CharityRegulatorWatch.com
