California Attorney General issued the following announcement on Oct. 7.
California Attorney General Rob Bonta and Assemblymember Jacqui Irwin today applauded Governor Gavin Newsom for signing legislation that will provide critical oversight of charitable fundraising on internet platforms. The bill, sponsored by Attorney General Bonta and authored by Assemblymember Irwin, authorizes the California Department of Justice to exercise supervision over charitable fundraising occurring on internet platforms to protect donors and charities from deceptive or misleading solicitations. The bill will go into effect on January 1, 2023, with additional regulatory rulemaking beginning January 1, 2022.
“In the midst of a record-breaking wildfire season and a global pandemic, Californians have opened their hearts and their wallets to charities across the state, the nation, and the world,” said Attorney General Rob Bonta. “As charitable fundraising moves increasingly online, AB 488 will provide my office with the ability to properly supervise third-party internet platforms and safeguard the proper treatment of Californians' donations. I'm proud to have worked with Assemblymember Irwin to get this important legislation signed into law.”
“After years of effort I am elated to have Governor Newsom’s signature on AB 488. Online charitable giving is the present and the future of fundraising for California non-profits. Ensuring the donations of Californians are received quickly and by the correct charities is common sense, and with this new law the Attorney General will be able to crack down on fraudulent actors that prey on people’s best intentions” said Assemblymember Irwin. “I would like to thank the dozens of stakeholders who contributed to this legislation over the past several years. The world of online fundraising is rich with various methods and models to encourage giving. Without the insight of these charitable fundraising platforms during the legislative process we would not have the effective and efficient law we achieved today.”
“This new law will increase donor confidence in online charitable giving and help ensure that nonprofits receive online donations in a timely way,” said Jan Masaoka, CEO of the California Association of Nonprofits. “We thank the Attorney General for sponsoring AB 488, Assemblymember Irwin for championing it, and Governor Newsom for signing it.”
The California Department of Justice is responsible for regulatory supervision of charities, trustees, commercial fundraisers, and other legal entities that hold or solicit donations for charitable purposes. In recent years, charitable fundraising on internet platforms has grown exponentially, altering the landscape of charitable giving beyond what current law contemplated. Internet companies have developed methods for individuals to donate to charities through websites and phone applications that serve as “charitable fundraising platforms.” As currently written, California’s solicitation laws do not specifically reach these online platforms, resulting in instances of deceit and mistreatment of charitable donations that the Attorney General’s Office is not able to address through enforcement of existing charity oversight laws.
AB 488 will:
- Create a level playing field for all charitable giving platforms, regardless of business model, by defining two new groups of entities, “charitable fundraising platforms” and “platform charities” that are subject to the Attorney General’s supervision;
- Require covered entities to provide meaningful and transparent disclosures on their internet platforms, promptly distribute donations, and prohibit solicitations for charities not in good standing with the Attorney General’s Registry of Charitable Trusts;
- Permit some instances of soliciting for a charity without prior consent if certain criteria that safeguard against harm to charities and the public are met; and
- Authorize the Attorney General’s Office to implement regulations, beginning January 1, 2022, on the registration and reporting of charitable fundraising platforms and platform charities, the timeframe for distributing donations, and donor notifications, among other requirements.