USA- California| New Law Regulating Charitable Fundraising Platforms

The Government of California has notified Assembly Bill 488 on October 7, 2021. The law amends The Supervision of Trustees and Fundraisers for Charitable Purposes Act to regulate online charitable fundraising platforms that operate in the state and the platform charities with whom they collaborate. The law will come into force on January 1, 2023. 

 

Key highlights: 

  • The new law addresses gaps in the existing charitable solicitation law framework as applied to charitable fundraising on internet platforms.  
  • The law creates two new regulated classes, charitable fundraising platforms and platform charities and recognizes a third term, recipient charitable organization, that rounds out the trifecta of relationships commonly seen in charitable fundraising arrangements occurring on online platforms. 
  • The law provides regulatory obligations to be undertaken by charitable fundraising platforms:  
  1. Registration and annual reporting requirements 
  1. Penalties for noncompliance.  
  1. Certain disclosures must be provided before a person can complete a donation or select or change a recipient charitable organization on a charitable fundraising platform. 
  1. Separate accounts for charitable fundraising platform to be created to hold funds raised through any solicitation on the charitable fundraising platform in an account or accounts separate from their own. 

 


*Tanvi Singh, Editorial Assistant has reported this brief.

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