Self-regulation draft flawed: lack of real discussion damages attempts at consensus.

Independent Sector and its Panel on the Nonprofit Sector recently renewed its pattern of releasing drafts "for comment" with little input from the broader community of operating charities. They provided even less opportunity for other established umbrella groups to secure the views of their members and provide cogent comments.

The most recent pronouncement provided only a week for comments, a deadline that most nonprofit umbrella groups could not possibly meet because they couldn't poll or take the pulse of their hundreds and thousands of members in such a short period of time.

This time the preliminary release was 29 principles of self-regulation. Like its previous "Final Report" to the Congress, this new report mostly consists of rehashing of principles contained in existing, widely adopted documents such as the "Donor Bill of Rights" and the "DMA Privacy Promise." However, like the previous report, it also shows the weakness of not having been vetted with real, operating charities or the groups that represent them.

For example, the "black letter law" of Principle 29 reads: "A charitable organization must ... not sell or otherwise make available the names and contact information of its donors without prior permission...." This statement runs directly contrary to the DMA Privacy Promise, and to industry practice, and would severely hamper fundraising by direct mail.

The actual common practice is the exact opposite. Most charities withhold exchanging names and mailing addresses only when the donor requests so or opts into a request to withhold the information. In other words most charities operate on a principle of "opt-out" not "opt-in." A brief discussion with the DMA Nonprofit Federation would have revealed that the draft report got it backwards and could have corrected this embarrassing oversight.

Another example is Principle 10 which reads: "A substantial majority of the board of a public charity should be independent--that is, individuals (1) who are not compensated by the organization as an employee or independent contractor; (2) whose own compensation is not determined by individuals who are compensated by the organization...." While this is seemingly innocuous for many if not most charities, it creates havoc for religious charities where the charity is part of a church or religious order and where the compensation relationships may be quite complex. A brief discussion with representatives of some of the religious umbrella groups for charities such as the National Catholic Development Conference would have revealed this flaw in the report.

One can only hope that unlike their prior pronouncements, Independent Sector will not again publicly take the misleading position that its National Panel speaks for all or nearly all operating charities. Not only are small and medium-sized operating charities almost completely unrepresented on the National Panel, but there are so many other groups that already represent the many and varied interests of the nonprofit community that Independent Sector would be well advised to spend a little time seeking out and listening to the advice of others.

Regular, collegial, informal information sharing has been and continues to take place amongst a number of organizations representing the interest of nonprofits and operating charities. These include: Association of Fundraising Professionals, National Catholic Development Conference, Direct Marketing Association Non-profit Federation, Evangelical Council for Financial Accountability, Alliance of Nonprofit Mailers, American Association of Fundraising Counsel, American Charities for Reasonable Fundraising Regulation, American Society of Association Executives, Association of Direct Response Fundraising Counsel, Association of Lutheran Development Executives, Council for Advancement and Support of Education, Direct Mail Fundraisers Association, Direct Marketing Association of Washington, National Council of Nonprofit Associations, and OMB Watch.

Representatives of these organizations which involve operating nonprofits, not large private foundations, regularly share their published and unpublished thoughts and concerns about self-regulation and accountability and information about each other's activities. Unlike the past and present pronouncements of Independent Sector and its National Panel, these representatives are interested in working together to see if there are common interests and alignments within the broader community. If appropriate, they may form coalitions and publicly tackle issues but if and when they do so, it is with the knowledge and understanding of the viewpoints of others.

It is not often the nonprofit community speaks with one voice but when it does so, it can be very powerful. Most recently the compromise with the United States Postal Service illustrated this point.

To speak with one voice, however, first requires listening to see if there is indeed a common purpose and a common view. One does not arrogate to oneself the mantle of spokesperson, it is granted by the community to those who have worked to understand the various viewpoints and who have captured the trust of the broader community.

So the problems with the most recent pronouncements by Independent Sector and its National Panel resemble the previous pronouncements--lack of effort to coordinate with and gain input and insight from many of the long established groups that represent nonprofits in a variety of ways. Thus, the results are not terrible, but they are unnecessarily flawed.

Geoffrey W. Peters is pro-bono general counsel of American Charities for Reasonable Fundraising Regulation in Washington, D.C.