Labyrinth, Inc. LogoLabyrinth, Inc. LogoLabyrinth, Inc. LogoLabyrinth, Inc. Logo
  • Our Services
    • Fundraising Registration
      • Charitable Registration
      • Charitable Registered Agent
      • Dynamic Disclosures
      • Fundraiser Registration
    • Secretary of State
      • Amendment
      • Annual Reports
      • Dissolution and Withdrawal
      • Foreign Qualification
      • Initial Report
      • Name Reservation
      • Nonprofit Formation
      • Publishing
      • Registered Agent
    • Tax Registration and Exemption
      • Payroll Tax Registration
      • Sales and Use Tax Registration
  • About Us
    • Our Story
    • Careers
    • Partnerships
      • Content Partnerships
      • Referral Partnerships
    • Client Testimonials
  • Resources
    • Blog
    • Information Center
    • Webinar
    • State by State Compliance Guide
    • White Papers
      • Charitable Registration White Paper
  • Contact Us
    • 888-532-0723
  • Lock IconLOGIN

California Assembly Bill 488

  • Home
  • Nonprofit Resources
  • Blog
  • Blog
  • California Assembly Bill 488
New York Eliminates Additional Reporting Requirements for Soliciting Nonprofit Organizations
New York Eliminates Additional Reporting Requirements for Soliciting Nonprofit Organizations
November 17, 2021
Regulatory Challenges of Online Fundraising Frameworks
The Need to Update Current Fundraising Regulatory Frameworks
December 21, 2021
December 2, 2021
Categories
  • Blog
Tags
California Assembly Bill 488

California Assembly Bill 488

The fundraising landscape has evolved in the last decade bringing with it many more ways through which nonprofit organizations can reach and attract prospective donors to support their cause. Nonprofit organizations are taking advantage of social networking sites, such as Facebook, Twitter, and LinkedIn. Online auctions service platforms such as eBay Giving Works and BiddingForGood. Charities are taking advantage of additional revenue streams such as multi-charity commercial covertures like AmazonSmile.

These fundraising opportunities have also brought about potential for fraud, conflict of interests, the risk of charitable organizations failing their public support test, potential unrelated business tax liability, fundraising registration compliance, and so on. The current regulatory framework needs to be updated to catch up with the changing landscape.

Furthermore, many well-intentioned nonprofit organizations through no fault of their own, could easily incur penalties and fines through inaccurate registration and reporting.

The California Assembly Bill 488 is the first action by a state to modernization current statutes to accommodate contemporary online charitable fundraising or regulate charitable fundraising platforms.

Dissecting California AB-488

Key AB-488 Key Definition

The bill defines charitable fundraising platforms as: “Any person, corporation, incorporated association or other legal entity that uses the internet to provide an internet website, service, or other platforms to persons in this state, and performs, permits, or otherwise enables acts of solicitation to occur”.

AB-488 or The Supervision of Trustees and Fundraiser for Charitable Purpose Act governs charitable corporations, unincorporated associations, trustees, commercial fundraisers, fundraising counsel, commercial co-venturers, and other legal entities holding or soliciting property for charitable purposes over which the state or the Attorney General has enforcement and supervisory powers.

Provisions of California AB-488

Under AB-488, the following provision will come into effect:

Commercial Co-ventures

Previously commercial co-venturers had the option of registering with the California Attorney General by completing a registration form and paying a $350 fee. Another option was to have a written contract in place with the benefiting charity and transfer all proceeds from the campaign raised for the charity to the charity every 90 days during the campaign.

California AB 488 Charitable Registration

Charitable fundraising platforms and platform charities are now required to file annual registrations with the Attorney General’s Registry of Charitable Trust and pay the applicable registration fee.

California AB-488 Provisions on Charitable Registration Renewal

Charitable fundraising platforms and platform charities are now required to renew their charitable sales promotion registration annually upon forms prescribed by the Attorney General and pay applicable fees to the Registry of Charitable Trusts Fund.

California AB-488 Provisions on Annual Reports Requirements

Charitable fundraising platforms and platform charities will be required to file annual reports on forms provided by the Office of the Attorney General.

California AB-488 Provisions on Compliant Charities or Charities in Good Standing

Charitable fundraising platforms and platform charities can only legally enter into arrangements with charitable organizations that are in good standing with the IRS, California Tax Franchise Board, and the Attorney General.

California AB-488 Provisions on Written Consent from Benefiting Charity

Charitable fundraising platforms and platform charities are required to obtain a written consent of the benefiting charitable organization before using its name in a campaign. They are also required to remove benefiting charities upon receiving a written notice from the charity.

California AB-488 Provisions on Disclosure to Prospective Donors

These platforms are required to provide disclosures to prospective donors the likelihood of deception, confusion, or misunderstanding

California AB-488 Provisions on Separate Accounts

To prevent the misappropriation of funds collected on behalf of the benefiting charity, CCVs are now required to hold these funds in separate accounts and to ensure that donations and grants are sent promptly to the benefitting charity with an accounting of any fees imposed for processing the funds and in accordance with rules and regulations.

California AB-488 Provisions on Penalties & Fees

The bill empowers the Attorney General to impose specified civil penalties to any person who violates, misleads, misrepresents, or fails to comply with provisions of the acts. In other words, failure to file in a timely manner, not filing, failure to correct errors or deficiencies when alerted to do so by the Office of Attorney General, and so on.

Trust the #1 Choice
for State Charitable Registration

More nonprofits choose Labyrinth
than any other service provider

Contact Us Today
 
Want To Learn More?

Join Our Monthly Webinar

Charitable Registration: How Can I Be Compliant?


Read Our Whitepaper

Charitable Registration: Navigating The Complexities

We proudly provide
compliance services for:

We proudly provide compliance services for:

How California AB-488 Could Shape the Future of Charitable Solicitation Registration

Although California AB-488 applies only to California charitable solicitation registration, it is safe to surmise that more states will enact similar laws. There is a growing consensus amongst state regulators to modernize existing law. In the recent NASCO conference, New Hampshire Attorney General stressed the importance of updating the existing fundraising regulatory framework to more appropriately reflect the nature of today’s charitable giving. If you have any questions, please do not hesitate to contact us.



© 2021 Labyrinth, Inc. All rights reserved.

Labyrinth, Inc. does not provide tax, financial, or legal advice. Use of our services does not create an attorney-client relationship. Labyrinth, Inc. is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.

The fundraising landscape has evolved in the last decade bringing with it many more ways through which nonprofit organizations can reach and attract prospective donors to support their cause. Nonprofit organizations are taking advantage of social networking sites, such as Facebook, Twitter, and LinkedIn. Online auctions service platforms such as eBay Giving Works and BiddingForGood. Charities are taking advantage of additional revenue streams such as multi-charity commercial covertures like AmazonSmile.

Share

Related posts

State of Pennsylvania
March 10, 2023

Pennsylvania’s New Annual Report Filing Requirement


Read more
December 7, 2022

Charitable Registration vs. Secretary of State Registration


Read more
December 6, 2022

Don’t Be Fooled by Fake Compliance Mailings


Read more

Stay Informed

Get our sector insights, research, and educational content first!

Sign Up For Emails

logo Inc.5000Labyrinth

Company

  • About Us
  • FAQs
  • Resources
  • Help Center
  • Client Testimonials
  • Careers

Services

  • Charity Registration
  • Fundraiser Registration
  • Registered Agents
  • Annual Reports
  • Foreign Qualification
Contact Us
  • 888-532-0723
  • info@labyrinthinc.com

We proudly provide compliance services for:


Labyrinth Inc. does not provide tax, financial, or legal advice. Use of our services does not create an attorney-client relationship. Labyrinth is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency. Access to our website is subject to our Terms of Use and Service Agreement.

Privacy Policy | Terms of Service | Secure Shopping
© 2023 Labyrinth, Inc. All Rights Reserved.