Cindy Lott, Columbia University, associate professor of practice; academic director for M.S. Nonprofit Management; Senior Fellow, Urban Institute
Nathan Dietz, senior researcher, Do Good Institute/research director, Civic Innovation Center/School of Public Policy, University of Maryland, College Park
"A Regulatory Breadth Index for U.S. State-level Charity Regulation:Better Data for Better Policy"
Abstract: Given the wide variance in state statutory regimes for United States charities, state-level oversight of charities is often viewed as a “patchwork” of varied and inconsistent regulation across the United States, implicating state- and even federal-level policy. State-level regulation represents an essential and large component of the overall regulatory environment for charities in the United States. Although the federal regulatory environment is relatively well understood, state-level charity regulation is more opaque, largely due to its breadth and complexity. Regulators, researchers, and practitioners face substantial difficulties when attempting to compare or assess regulatory environments across state jurisdictions or when seeking to understand state-level enforcement patterns (Lott et al., 2021). Based on a detailed analysis of state-level charity regulations involving more than forty regulatory indicators, we have derived quantitative measures of state-level regulatory models to inform state regulators, researchers, and practitioners seeking a more nuanced and comprehensive understanding of charity regulation in the United States.
This year, the United States Supreme Court decided an important case where questions regarding state-level charities regulation squarely were put before the Court, with research related to this paper cited in several briefs. The first major charities regulation case in decades to be argued before the Court, Americans for Prosperity Foundation v. Bonta will shape how states regulate charities that operate within their jurisdictions. APF v. Bonta, No. 19-251 (U.S. July 1, 2021) (holding state attorney general regulatory requirement that charities submit confidential lists of major donors to state charities officials (Form 990 Schedule B violates First Amendment).
Recent scholarship on United States charity regulation has focused on 1) the division of regulatory authority between state and federal regulators and the shift from federal to state-level oversight of charities (see, e.g., Lott and Fremont-Smith 2017, 172-173; Mayer 2016, 938-943); 2) to what extent the government should regulate charities and whether the sector should aspire to increased self-regulation (see, e.g., Galle 2018; Fishman 2015); 3) the potential benefits and pitfalls of using Big Data in charity regulation (Mayer 2019); and 4) defining and assessing state-level charity regulation (Lott, et al. 2016).
Specific to state-level regulation, the initial major research analyzed the varying structures of charity regulation offices throughout the U.S. (Lott et al. 2016), and was then used to build an index of charitable solicitation regulatory breadth (Dietz et al. 2017) and address the relationship between a state’s regulatory office size and structure and the scope of outreach and enforcement activities (Adelstein and Boris 2018).
Another paper explored the issue of bifurcated state-level regulatory authority and its implications for future research (Lott et al. 2018). This paper will build directly on the work of these authors to implement the Regulatory Breadth Index, (Lott et al. 2021), to analyze discrete, overarching and important regulatory queries for the charitable sector.
Applying finite mixture modeling to examine previously compiled data on laws applicable to charities, we derive quantitative measures of both the nature and breadth of state level charity regulation.We use latent class analysis, discrete factor analysis, and related statistical modeling tools to identify unobserved heterogeneity in state-level regulatory approaches and to characterize and classify states accordingly.
This modeling affords opportunity to explore how state regulatory models are related to other state-level characteristics, such as nonprofit density and various political and economic variables. This research paves the way for future research examining enforcement patterns and other regulatory issues of great interest to practitioners and scholars alike.
The patterns and findings revealed will inform: 1) state regulators as they revise regulatory regimes within their states and collectively create model laws; 2) researchers seeking a more comprehensive understanding of the regulatory environments in which nonprofits operate; 3) practitioners seeking new avenues for advocacy by positioning a state’s regulatory approach into a broader national context; and 4) current legal debates on mandatory disclosures with significant real-world implications for the charitable sector.
Bios: Cindy M. Lott, Esq., is an associate professor of professional practice and serves as academic director for nonprofit management programs at Columbia University’s School of Professional Studies, where she developed the curriculum for, teaches in and manages the M.S. in Nonprofit Management. Previously, she served as executive director and senior counsel to the National State Attorneys General Program at Columbia Law School, as well as the developer and lead counsel to the Charities Regulation and Oversight Project.
Lott is a Senior Fellow at the Center on Nonprofits and Philanthropy at the Urban Institute and was an inaugural Policy Fellow at Independent Sector. She develops and moderates a series of national convenings on state and federal regulation of the charitable sector and is engaged in original research regarding regulatory capacity and enforcement at the state level; this research was cited before the U.S. Supreme Court in AFP v. Bonta (2021).
Lott is a frequent speaker at national conferences in the areas of philanthropic and nonprofit policy, state regulation, compliance, ethics, management and governance. In addition, she continues her work with state attorneys general across a range of issues and research, serving on the American Constitution Society’s Attorney General subcommittee and has served as faculty for a seminar on state attorneys general at Columbia Law School.
Lott served on the IRS Advisory Committee on Tax Exempt Entities (ACT, 2015-2018), the public policy committee of Independent Sector, is a co-founder and co-chair of the Public Policy and Law sub-committee of ARNOVA, worked with major foundation leaders on behalf of the Council on Foundations and was a board member of the national charity monitor Wise Giving Alliance. She has taught as an adjunct both at Columbia Law School and Indiana University's School of Public and Environmental Affairs (Capstone, nonprofit management).
Lott served as Chief Counsel to the 2004 Democratic National Convention and was Deputy Counsel to the 2000 Democratic National Convention. She has worked at large firms, as well as serving as a Chief Counsel and Section Chief in the Indiana state attorney general's office. Lott is a 1993 graduate of the Yale Law School and clerked for the United States Court of Appeals, First Circuit. She is admitted to practice in the District of Columbia, Indiana and Massachusetts. She graduated Phi Beta Kappa from Indiana University in 1989 with a B.A. in Comparative Literature.
Nathan Dietz, Ph.D., is a senior researcher at the Do Good Institute (DGI) in the School of Public Policy at the University of Maryland, College Park. His work with DGI focuses on social capital, volunteering, charitable contributions, civic engagement and social entrepreneurship. Dr. Dietz is the coauthor of four recent DGI publications, which are available on his homepage.
His other recent publications include articles in peer-reviewed journals such as Nonprofit and Voluntary Sector Quarterly, the American Journal of Community Psychology, and Nonprofit Policy Forum, as well as two recent Spotlight reports published by the Giving Institute, sponsors of the annual Giving USA report on American philanthropy.
Since 2013, he has held an appointment as senior research associate at the Center on Nonprofits and Philanthropy at the Urban Institute, has served as the associate director for the National Center for Charitable Statistics and has led the Urban Institute’s participation in the (nonprofit) Growth in Giving Initiative and the Fourth Sector Mapping Initiative.
Immediately before joining the Urban Institute, Dr. Dietz served as senior program manager at the Partnership for Public Service. From 2002 through 2012, he worked at the Corporation for National and Community Service (CNCS), ultimately serving as associate director for research and evaluation.
Prior to government service, he held an appointment as assistant professor of political science in the School of Public Affairs at American University. He earned a master’s degree and a Ph.D. in political science from the University of Rochester. He graduated cum laude from Northwestern University, with a dual-major bachelor’s degree in Political Science and Mathematical Methods in Social Sciences.