With an Ear to The Rail

May 24, 2021 - by Michael Ferragamo

There’s an old adage I love about having an ear to the rail. The idea is that you can “hear” a heavy train coming from miles away because the rails creak and groan with the strain as it rolls along. It’s only an adage because it’s basically impossible, but the idea of it is still awesome to me — who wouldn’t want to get a heads-up of what’s coming their way before it hits?

Actually, I like foresight so much that I was delighted (and honored) this past February to be appointed to the ADRFCO Council Advisory Board.

This group of experienced representatives from a wide array of fundraising agencies in the nonprofit market comes together to give each other an ear to the rail by sharing knowledge. Our goal is to improve how fundraisers operate and collaborate to solve problems. Whether it’s holding fellow fundraising agencies to high ethical standards, developing principles of self-regulation so we can avoid unnecessary and overburdensome government legislation, or pushing back when that sometimes happens, the Council’s got it covered.

The ADRFCO Council met recently, and so I thought that I might share what I’m hearing on the rails with you.

A Big Freight Train Right Ahead – New York State’s Double Dipping

Many of you may have received TNPA’s most recent newsletter, but I want to specifically highlight one of the last items in it — “New York Takes Two Bites of the Apple.” (I would have gone with "New York Tries to Take a Bigger Apple," but maybe that’s why I’m not the Editor).

The article highlights a new law that New York enacted in 2020 that imposes a duplicative registration requirement on nonprofit organizations.

The basic gist of (and pain point with) the law is this: nonprofit organizations that want to fundraise in New York are required to register with the New York Secretary of State (and pay an additional $25 for the privilege of doing so) on top of their mandated regular registration with the New York Attorney General (of course, still paying $25).

This law does not affect fundraising counsel directly. However, it may have a significant impact on nonprofits cumulatively. During the quarterly ADRFCO Council meeting, a member noted that by their back-of-the-napkin math we could expect the body of nonprofits fundraising in New York to pay an additional $1,000,000 annually to satisfy this new law. The worst part? It’s doubtful whether this double-dipping is even constitutional as it’s likely an unreasonable burden on free speech.

If you know of nonprofits that solicit in New York (or if you are an organization that solicits there) and have concerns about this law, TNPA and the Lawyers Alliance for New York have prepared an opposition letter that organizations can sign here, as well as an automated email that they can send to New York legislatures here. Feel free to send yours, and pass along to employees and constituents to also sign and send!

The Mile Long Train That’s Coming Through the Tunnel – Postage Rate Increases

I know you’ve been hearing about this one, but it’s worth repeating. Postage rates are expected to rise. The Postal Board of Governors adopted increases as expected on May 28. As a result, nonprofit mailers can anticipate a 6.5% to 8.5% rate increase (depending on mail class) to become effective around Labor Day. And the whispers in the wind are that we’ll be seeing the higher side of those estimates.

The rates are higher than the rate of inflation, and that’s what has us up in arms. These rates go against the Postal Reform Act of 2006, which called for predictable rate increases, largely in line with the rate of inflation.

If this is your first time hearing about this, you can learn more at The Nonprofit Alliance USPS & Postal Policy resource guides.

The Locomotive That's Still Several Miles Away – DAFs

According to the National Philanthropic Trust, there was growth in donor-advised funds (DAFs) in every key metric for the tenth consecutive year. In 2019, grantmaking from DAFs to qualified charities totaled more than $25 billion, a 93% increase since 2015.

That’s why our sights are on this far away (but interesting) tidbit that we’re starting to hear about: the possibility of DAF legislation in California. It sounds like it will be framed on enhancing distribution accountability and ensuring public confidence in DAF Providers. Like DAFs? Love DAFs? Then stay tuned as I’m sure there will be more to come!

At the Station – ADRFCO Council Vacancy

On a fun note, ADRFCO is currently looking for another member to sit on the Council. If you know someone from a TNPA member agency who would like to join the fun, let me know and I will pass it along (quadruple bonus points if they’re with an agency who wants to join the TNPA so they can be eligible).

 

Lautman Maska Neill & Company is a founding member of the TNPA and ADRFCO.

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