BILL ANALYSIS �
AB 2077
Page 1
Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
AB 2077 (Allen) - As Amended: April 21, 2014
SUBJECT : Charitable organizations: enforcement.
SUMMARY : Requires money in the Registry of Charitable Trusts
(RCT) Fund to be used by the Attorney General to enforce the
registration and reporting requirements of commercial charitable
fundraisers, pursuant to the Supervision of Trustees and
Fundraisers for Charitable Purposes Act. Specifically, this
bill :
1)Requires money in the Attorney General's RCT Fund, upon
appropriation by the Legislature, to be used by the Attorney
General to enforce the registration and reporting provisions
of the Supervision of Trustees and Fundraisers for Charitable
Purposes Act (Act).
2)Makes a technical and clarifying amendment.
EXISTING LAW
1)Establishes the Act, which provides comprehensive regulation
of charitable corporations, unincorporated associations,
trustees, and other legal entities holding property for
charitable purposes, commercial fundraisers for charitable
purposes, fundraising counsel for charitable purposes, and
commercial coventurers, over which the state or the Attorney
General has enforcement or supervisory powers. (Government
Code (GOV) Section 12580 et seq.)
2)Establishes the RCT Fund in the State Treasury to be
administered by the Department of Justice, wherein all
registration fees, registration renewal fees, late fees, and
other fees shall be deposited. (GOV 12587.1)
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of this bill . This bill requires money in the RCT
AB 2077
Page 2
fund to be used by the Attorney General to enforce the
registration and reporting provisions of the Act. This will
help the Attorney General ensure adequate notice and
registration requirements are provided to protect consumers
from fraudulent or misleading commercial charitable
contributions. This bill is author sponsored.
2)Author's statement . According to the author, "a recent
investigation of America's 50 Worst Charities by the Center
for Investigative Reporting and the Tampa Bay Times [show] an
overwhelming majority of certain contributions - some 77
percent - go towards professional fundraisers and managers who
orchestrate dialing-for-dollars phone drives, rather than the
cause itself. The 50 worst raised $1.3 billion over 10 years
- and almost $1 billion of it went straight to fundraisers.
"Commercial fundraisers - the for-profit companies behind the
vast majority of those telemarketing appeals for charity
donations - raised almost $300 million on behalf of nonprofits
in California in 2012, according to figures collected by the
state Attorney General. The nonprofits got just a fraction of
the proceeds - an average of only 37 percent, or $108 million
-- and the commercial fundraisers kept the rest for
themselves."
"This year the [Orange County] Register specifically reported
a local [OC] charity giving only [three] percent to the
intended cause. The California attorney general sued the
charity in 2009, on the grounds that the charity mislead
their donors about the cause at hand, and also fraudulently
attempted to trick them into believing that they had donated
before, when in fact they had not. AB 2077 will move the
'scam charity' conversation forward with the intent of
protecting kindhearted patrons and the integrity of legitimate
nonprofits throughout California."
3)Registration and reporting requirements . The Supervision of
Trustees and Fundraisers for Charitable Purposes Act, requires
a commercial fundraiser for charitable purposes to register
with the Attorney General prior to soliciting or receiving any
funds, assets, or property in California for charitable
purposes. Fundraisers must register with the Attorney
General's RCT within 30 days, and file notice not less than 10
working days prior to the commencement of each solicitation
campaign, event, or service.
AB 2077
Page 3
This bill would simply allow the Attorney General to use money
in the RCT Fund for enforcement of the Act.
4)Previous legislation . AB 2327 (Feuer), Chapter 483, Statutes
of 2012, revised enforcement provisions to provide that the
Attorney General may issue a cease and desist order when any
person or entity pursuant to the Supervision of Trustees and
Fundraisers for Charitable Purposes Act has committed an act
that would constitute a violation of, or is operating in
violation of, any provision of the act.
SB 878 (Dunn), Chapter 212, Statutes of 2005, revised the
requirements for these disclosures, including deleting
provisions requiring disclosure of the percentage of the
amount collected that is used for charitable purposes.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Girard Kelly / B.,P. & C.P. / (916)
319-3301