New law aims to deter donation misuse

May 23– Within the last 13 months, Middle Tennessee and West Tennessee suffered record flooding and East Tennessee battled deadly tornadoes.

These natural disasters have given birth to a new state industry: disaster relief.

Since Tennesseans have shown that they are still volunteers, ready to lend a hand when disaster strikes, new charities and organizations have formed to help meet the needs of victims.

Now a new law will make it easier to see how the hard-earned money donated to organizations engaged in disaster relief is spent.

The Secretary of State’s Division of Charitable Solicitations and Gaming is in charge of registering charities that solicit contributions in the state.

As part of the registration requirements, charities must submit annual financial reports.

The new law increases financial reporting requirements for organizations which solicit contributions in Tennessee for disaster relief, providing greater transparency about how money is spent and hopefully deterring charities from misusing donations.

The new law requires groups that raise $25,000 or more annually for disaster relief to file quarterly reports with the division detailing how the money is being spent.

Also, the law requires organizations that have raised disaster relief funds dating back to May 1, 2010 to file reports on how that money was spent.

That includes fundraising activity that came in the wake of the flooding that hit Nashville and other parts of the state last year.

"People often feel compelled to give to charities after a major disaster and because they are eager, sometimes they forget to check with our office to see if a group is properly registered," said Secretary of State Tre Hargett.

"This new law increases transparency with charities, monitors their financial expenditures each quarter and makes that information available to potential donors," he said.

Reports with detailed information about how organizations spend their money are available on the Secretary of State’s web site at: http://tnsos.org/charitable/CharitableOrgReports.php.

The Division of Charitable Solicitations and Gaming also has authority to investigate and assess civil penalties against organizations that are required to register but fail to do so, and organizations that engage in fraudulent or misleading fundraising practices.

To report suspicious activity about a charitable organization, contact one of the division’s investigators at (615) 741-2555.