When all 50 states and the Federal Trade Commission joined together in May to sueCancer Fund of America and three related charities for fraud after a four-year investigation, some commentators asked, “What took so long?”
As a former state attorney general, I thought, “What an accomplishment!” In my experience, state nonprofit regulation presents formidable structural, financial, and legal challenges that make this first broad-based enforcement action a significant milestone.
When I was appointed Tennessee attorney general in 2006, one of my biggest surprises was the scope and complexity of the office’s nonprofit work. I knew the office had a broad portfolio, but I did not expect to litigate over a multimillion-dollar university art collection, foundation mismanagement, or misuse of nonprofit corporations. I should not have been surprised, since the nonprofit sector is estimated to account for 5 percent of the nation’s gross domestic product and 10 percent of its private-sector work force.