SB 631

This bill makes various changes relating to registration, reporting, and other

requirements applicable to charitable organizations, persons involved with

solicitations on behalf of charitable organizations, and professional employer

organizations. The bill modifies many of the administrative procedures by which the

Department of Financial Institutions (DFI) regulates charitable organizations,

persons involved with solicitations on behalf of charitable organizations, and

professional employer organizations.

Charitable organizations, professional fund-raisers, and fund-raising

counsel

Under current law, subject to exceptions, DFI regulates the following, and the

following must be registered with DFI: a charitable organization that solicits, or has

solicited on its behalf, contributions in this state (charitable organization); a person

who, for compensation, solicits, or employs or engages others who are paid to solicit,

contributions in this state for a charitable organization (professional fund-raiser);

and a person who, for compensation, plans or manages, or advises or prepares

material with respect to, solicitations in this state for a charitable organization, but

who does not make solicitations or employ or engage others to make solicitations, and

who has custody of contributions solicited for a charitable organization (fund-raising

counsel).

This bill makes numerous changes relating to DFI's regulation of charitable

organizations, professional fund-raisers, and fund-raising counsel, including all of

the following:

1. The bill modifies DFI's application procedures and requirements for initial

or renewal registration with DFI as a charitable organization, professional

fund-raiser, or fund-raising counsel, as well as certain post-registration

requirements.

2. The bill increases, from $5,000 to $25,000, subject to adjustment for

inflation, the amount of annual contributions a charitable organization may receive

without being required to register with DFI if other conditions are satisfied.

3. The bill modifies requirements for financial information included with an

application for registration as a charitable organization. Current law requires the

applicant to submit to DFI an annual financial report if the charitable organization

received annual contributions of more than $5,000 but not more than $100,000 and

an audited financial statement if the charitable organization received annual

contributions of more than $100,000. The bill requires initial registration

applications to include a reviewed financial statement if the charitable organization

received annual contributions of more than $300,000 but not more than $500,000

and an audited financial statement if the charitable organization received annual

contributions of more than $500,000, with these amounts subject to adjustment for

inflation. The reviewed and audited financial statements must be prepared in