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Acting Attorney General For New Jersey Announces Proposed Charities Regulation

On July 1, 2021, in Americans for Prosperity Foundation v. Bonta, 141 S.Ct. 2373 (2021), the United States Supreme Court ruled unconstitutional a California regulation requiring charitable organizations to file with the state Attorney General’s Office a copy of their Internal Revenue Service (IRS) Form 990 Schedule B (Schedule B) when renewing their annual registrations. Schedule B is a form that requires tax-exempt organizations to disclose the names and addresses of major donors. 

In light of the United States Supreme Court’s decision, the Division’s Charities Registration Section has proposed to revise its rules to eliminate the requirement that charities submit the Internal Revenue Service (IRS) Form 990 Schedule B as part of their initial and yearly registrations. In the interim, the Division will not be taking enforcement action based on the failure to include Schedule B or an equivalent donor schedule in such registrations. The Division will deem any entities that were previously deemed non-compliant solely because they failed to submit Schedule B or an equivalent donor schedule to be in compliance with registration requirements. All other regulations at N.J.A.C. 13:48-1.1 et seq. remain in effect and the Division continues to require the submission of all other schedules and statements.

The proposed regulation, and information on how to submit a comment by December 17, 2021 can be viewed here.

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Attorney General Moody Highlights Nearly Half a Million Dollars Secured for Nonprofits Following Shutdown of National Charity Telefunding Operation

Attorney General Ashley Moody is highlighting nearly half a million dollars secured for nonprofits this year following a successful court action against an unlawful charity robocall scheme. Through a court action earlier this year, Associated Community Services, its sister companies and owners were ordered to pay almost $500,000 in charitable contributions. In Tampa today, Attorney General Moody ceremoniously presented one of these payments to a veteran representing the Semper Fi & America’s Fund.

Attorney General Ashley Moody said, “This deceptive charity robocall scheme purported to help veterans, first responders and cancer patients but instead ripped off generous Floridians and donors nationwide. As Florida’s Attorney General, I am committed to holding accountable those who target and exploit the kindness of others for their own financial gain. It is my pleasure to redirect these funds to court approved organizations that work to provide resources to those in need.”

Semper Fi & America’s Fund CEO, President and Founder Karen Guenther said, “We are incredibly grateful for the hard work of Florida Attorney General Ashley Moody and this amazing donation that will impact the lives of many military heroes under our care. This special donation will be matched dollar for dollar through our annual Double Down for Veterans campaign with The Bob and Renee Parsons Foundation to provide critical funding for our combat wounded, critically ill and injured service members, military family members, and veterans, from all branches of the U.S. Armed Forces. This outpouring of support is truly humbling and deeply appreciated by everyone in The Fund family.”

The funding is the result of previous legal action taken by Attorney General Moody, along with the Federal Trade Commission and agencies from 37 other states and the District of Columbia. The coalition worked together to shut down the massive telefunding operation that bombarded 67 million consumers with more than one billion deceptive charitable fundraising robocalls.

As a result of the coordinated action, $495,000 was recovered and redistributed to the American Cancer Society, Semper Fi & America’s Fund and the Tunnel to Towers Foundation. The money will be used to assist with cancer treatment and to help military service members, first responders and their families.

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Former Autism School Administrator Sentenced to Jail for Theft

The former executive director of the P.A.T.H. School for Autism, Inc. and the P.A.T.H. Academy for Autism, Ltd. has been sentenced to 90 days in jail after a joint investigation by Ohio Attorney General Dave Yost, the Bryan Police Department, and the Ohio Department of Education found she stole more than $150,000 from the school.

Bonnie Kimpling, 53, of Chicago, was sentenced for one count of Aggravated Theft, a third-degree felony, in Williams County Common Pleas Court. In addition to jail time, she was sentenced to five years of community control, fined $2,500 and ordered to pay approx. $32,269 in restitution.

Kimpling was also given a 2-year prison term if she fails to meet the terms of her probation.

“This school’s mission was to work alongside parents to educate children facing difficult obstacles, not to get rich off of them,” Yost said. “This thief not only let down kids, she left a hole in this community.”

The P.A.T.H. School was shuttered after Kimpling was terminated and indicted in 2020 for the theft.

Yost’s Charitable Law Section and the Bureau of Criminal Investigation, assisted in the investigation. Williams County Prosecutor Katherine Zartman prosecuted Kimpling.

P.A.T.H. Schools was among the nonprofits operating in Ohio whose operations are overseen by the Attorney General’s Office. AG Yost offers several resources and guides for charities, including proper oversight of finances as well as how to report improper actions by a charity.

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Attorney General Bonta and Assemblymember Irwin’s Legislation to Provide Oversight of Online Charitable Fundraising Platforms Signed into Law

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.