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New California Legislation to Target Charities, Fundraisers

WASHINGTON (AFP eWire - Nov. 24, 2003) - California Attorney General Bill Lockyer has indicated that he will be sponsoring legislation designed to strengthen accountability and disclosure for charities and charitable fundraisers.

The new legislation comes on the heels of several highly publicized incidents involving charities in the state, the most notable of which was the shutdown of Pipevine, a fund distributing organization that could not account for millions of dollars intended for charities.

In addition, the attorney general earlier this year sponsored a bill intended to increase corporate accountability, thus the charity legislation is expected to have similar provisions to that bill as well as the federal Sarbanes-Oxley bill.

The new legislation is expected to increase the amount of information that charities and fundraisers must disclose to both donors and state government and allow the attorney general greater power and flexibility in pursuing fraud.

In what could be a positive move, the Attorney General's Office has indicated that the bill may also contain additional safeguards for charities that use for-profit fundraisers. These provisions may help smaller charities protect themselves against fraudulent fundraisers who try to take advantage of cash-strapped nonprofits unfamiliar with the law or best practices.

AFP will be working with the California Attorney General's Office to ensure the proposed legislation does not unduly burden legitimate charities and fundraisers in their revenue-generating efforts.

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