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New California Legislation Regulates Charitable Fundraising Platforms

Charitable fundraising platforms such as Donorbox, Indiegogo, Fundly, and GoFundMe Charity provide a potential source of funds for exempt organizations.  However, these platforms generally are not subject to the same level of regulatory oversight as other charitable solicitors and therefore have provided a way for fake charities – such as Steve Bannon’s We Build the Wall – to take advantage of the public’s generosity.  However, on October 7, 2021, Governor Gavin Newsom signed legislation that will provide oversight of these platforms in California. 

Assembly Bill 488, which goes into effect on January 1, 2023, extends the California Attorney General’s supervision of charitable solicitors to these platforms and to “platform charities.”  Under the act, a platform charity “facilitates acts of solicitation on a charitable fundraising platform” and is either a California-registered charity or a non-California charity that does business or holds business property in California.  Charitable fundraising platforms and platform charities must file registration forms and written reports with the California Attorney General.  Violation of the act “with the intent to deceive or defraud any charity or individual” as well as other acts and omissions are subject to civil penalty.  With almost a year until the law becomes effective, we will monitor for developments.

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