See update at end of story
A new Nevada law that took effect on October 1 might cut down on or even eliminate the large number of “faux charity” cold-calling money solicitations made in the Silver Silver. I say “might” because Nevada regulators don’t have the greatest track record of protecting the donating public by policing dodgy charitable appeals or, as I will point out again, even enforcing existing law in this area.
Regular visitors to this space are quite aware of what I mean by a faux charity. It is a cause whose pitch on the phone sounds like it is raising money for a meritorious cause like fighting an illness or supporting law enforcement. But in fact it’s a political action committee–often conveniently omitting the letters PAC when making the telephone pitch–run by shadowy folks that take in donations very little of which are then spent for campaign contributions, which isn’t a charitable purpose, either. Almost all the donations go to fundraising and overhead, with the organizers raking off undisclosed sums.
Previous Nevada law required most charitable organizations soliciting federally tax-deductible contributions in Nevada to register with the Nevada Secretary of State’s Office and make some disclosures. But contributions to PACs by law aren’t tax-deductible, so faux charity PACs didn’t fall under the charitable solicitation laws of Nevada–a giant loophole.
Nationally, most PACs are required to make publicly available disclosures to federal agencies, but they can be hard to find and analyze. Nevada has laws requiring state registration of certain PACs doing business in the state. But I have yet to see a Nevada registration of a faux charity PAC calling me, most of which list addresses in Washington, D.C., and other far-away places. Continue reading
