On March 24, 2024, California approved final regulations governing charitable fundraising platforms and platform charities. These regulations implement Assembly Bill No. 488 (AB 488), an act that generally went into effect on January 1, 2023.

The act requires certain entities to register with and to file registration forms, reports, and other specified items with the Attorney General’s Registry of Charities and Fundraisers. In addition, the act prohibits specified acts and practices in the planning, conduct, or execution of any solicitation or charitable sales promotion including misrepresenting or misleading anyone in any manner to believe that another person sponsors, endorses, or approves a charitable solicitation or charitable sales promotion when that person has not given consent in writing to the use of the person’s name for these purposes. The act also prohibits representing that any part of the contributions solicited by a charitable organization will be given or donated to any other charitable organization unless that organization has consented in writing to the use of its name prior to the solicitation.

Changes from the Earlier Proposed Regulations

As far as I can tell from a quick review of the Final Statement of Reasons and its Attachment A, the only substantive change made from the earlier proposed regulations was to the effective date for sections 318 to 322, which was extended to January 1, 2025:

• § 318. Consent from Recipient Charitable Organizations for Charitable Fundraising Platforms and Platform Charities.
• § 319. Tax Donation Receipts from Charitable Fundraising Platforms and Platform Charities.
• § 320. Lengths of Time for Sending Donations by Charitable Fundraising Platforms and Platform Charities; Selection of Alternate Charitable Organizations.
• § 321. Information for Charitable Organizations Regarding Donations Sent by Charitable Fundraising Platforms and Platform Charities.
• § 322. Information for Donors or Persons Regarding Donations Sent by Charitable Fundraising Platforms and Platform Charities.

Based on the minimal changes from the proposed regulations, some previous posts we’ve published on AB 488 and the proposed regulations still appear relevant:

California’s New Law for Charitable Fundraising Platforms

Crowdfunding Laws: Platform Charities (pre-proposed regulations)

We’ll be following up with some additional posts on the regulations, which may impact many more charities than is broadly understood, and will, from time to time, add additional resources to the Resources section below.

5 Quick Compliance Tips for Charities and Their Agents

1. Determine if your charity falls within the definition of a charitable fundraising platform (CFP) or platform charity (PC).
2. If your charity is a CFP or PC, ensure that any fundraising you do on the Internet that is covered by AB 488 and its regulations is compliant – this includes soliciting, permitting, or otherwise enabling solicitations, or receiving or controlling funds from donations or recommended donations for charitable organizations, only if they are in good standing with the Internal Revenue Service, the Franchise Tax Board, and the Attorney General.
3. If your charity is a CFP or PC, ensure that any grantmaking you do from funds raised on the Internet in a manner that is covered by AB 488 and its regulations is compliant – this includes distributing or granting funds to charitable organizations only if they are in good standing with the Internal Revenue Service, the Franchise Tax Board, and the Attorney General.
4. A CFP or PC that engages in solicitation type A (generally, including online solicitations from donors who are platform users by listing or referencing by name one or more recipient charitable organizations to be sent donated funds) or type B (generally, including the permitting or enabling of online crowdfunding campaigns created by platform users) must allow donors or persons engaging in peer-to-peer charitable fundraising an option to provide their name and contact information to a recipient charitable organization (RCO) and generally must disclose that the donations will be considered unrestricted as to the RCO unless such RCO has approved such solicitation for restricted funds in advance.
5. A CFP or PC must disclose to persons engaging in peer-to-peer charitable fundraising who are sent donated funds from a CFP or PC that engages in solicitation type B that they must send the donated funds to the recipient charitable organization referenced in solicitations no later than 10 business days after receipt.

Resources

Attorney General Page on Charitable Fundraising Platforms and Platform Charities (includes drafts of new forms, which have yet to be approved for use)

Online Fundraising in 2024: Update on Attorney General Proposed Regulations of Charitable Fundraising Platforms (January 29, 2024, Adler & Colvin)

Has Your Organization been Blocked by Charitable Fundraising Platforms? It is likely due to California’s new “Good Standing” requirement. (February 2, 2024, Perlman + Perlman)