The Mississippi Regulation of Charitable Solicitations Act, enacted in 1991, authorizes the Secretary of State (SOS) to regulate charities soliciting funds in Mississippi. The SOS aims to protect citizens from unscrupulous nonprofits through a process that includes selecting charities for examinations. The SOS Charities Division claims to select entities based on complaints and random selection but will not disclose the extent of random selections. Mississippi law mandates that information from SOS investigations or examinations remains confidential and exempt from the Mississippi Public Records Act. The SOS lacks a dedicated budget for examinations and cannot provide their annual cost.
Examination outcomes are confidential, with only actions against charities posted on the SOS website under Legal Actions. In Fiscal Year (FY) 2023, the SOS reported 363 enforcement actions. The SOS claims to work with charities to remedy infractions, aiming for compliance over “gotcha” tactics. However, the lack of disclosure on examinations not resulting in enforcement actions prevents assessment of their effectiveness.
SOS Examination of ABC
On July 27, 2023, ABC volunteers participated in a call with Mayor Gaskin, the City’s CFO, and City Attorney Jeff Turnage. The City officials claimed it was unfair for ABC to demand City transparency (regarding unresolved public records requests) while ABC lacked transparency about its donors, expenses, and employees. ABC has volunteers but no paid employees. Donors voluntarily contribute to ABC, unlike the City’s compulsory taxation. Despite having a new mayor (elected in 2021), many holdovers from the previous administration remain. Donors or supporters of ABC may face retribution. For example, under the current administration, a property titled to an outspoken ABC supporter was cited for a code violation and fast-tracked for demolition. Or, under the prior administration when the police chief, himself, went to an ABC supporter’s business that was outspoken about City policy and when the City Attorney sent a letter to a ABC supporter’s corporate offices asking the office to reprimand them. ABC encourages supporters to stand against governmental overreach, fraud, and waste, but will not disclose its donors.
On August 14, 2023, the SOS notified ABC of an “examination” via certified letter. The examination lasted six months, ending in February 2024. Will Sanders, CPA, volunteered to represent ABC before the SOS, leveraging his auditing experience. The SOS asserts the US Constitution Sixth Amendment’s confrontation clause does not apply since examinations are not prosecutions. They claim the source of information is irrelevant, stating, “It matters not to our office how or from whom we receive information. What does matter is whether the law is being followed or not.” However, knowing the nature of complaints even excluding identities may allow charities to address potential misconceptions that may have given rise to complaints.
The SOS’ examination information request included item “6. Documentation of income including Fundraising, donor lists [emphasis added], grants, in kind donations and any other sources of income.” and “15. List of employees, full or part time and any contract labor.”, echoing the City’s earlier questions. The lack of internal oversight of the charities examination unit raises concerns about potential abuse of power. The SOS’s annual report indicates only 154 examinations of 12,144 registered charities were conducted in FY 2023, suggesting ABC was likely targeted. That raises questions about who would seek to weaponize the government against ABC.
The SOS examination of ABC concluded with no action.
Confusing SOS Charities Regulation
The SOS published a 2,002-page 2023 Report on Charitable Organizations, which appears more a collection of raw data than a useful analysis. For example, “Expired Charities” lists entities the SOS claims are no longer registered, yet they may have “Good Standing” status in the SOS Business Search. A more interactive database, similar to the Legal Actions search, might be more useful. The SOS also publishes the “Mississippi Regulation of Charitable Solicitations” (the state laws pertaining to soliciting charities, §79-11 of the MS code) and the more informative “Mississippi Charities Act Rules”, which outline how the SOS applies charity laws. The Rules document notably does not reference investigations or examinations, instead focusing on administrative hearing procedures.
In Columbus, there are at least two curious nonprofit entities on the SOS webpage. Zumba in Pink (ZIP), a registered nonprofit (since August 2023) is not registered as a charity and the IRS reports no 2023 nonprofit tax return. ZIP is directed by the wife of the Ward 5 councilman. [That same Ward 5 Councilman, though ethically flawed, wants to be your next Mayor and has sufficiently lowered the bar for candidate qualification.] Building Bridges of Hope (Bridges), directed by the former City of Columbus Community Outreach director, received taxpayer funds the current COO characterized as the former director’s personal slush fund. Bridges has no registered agent, no principal address on file, and is classified as an expired charity by the SOS yet has corporate good standing status and filed IRS nonprofit tax returns through 2023.
The SOS’s charity oversight resources of time and funds may be better allocated to ensuring fair elections. The Mississippi legislature should revisit its charity oversight laws and assess whether they function as intended or risk becoming a weapon for misuse.
