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Attorney General Bonta Releases Proposed Regulations Implementing New Online Charitable Fundraising Law

California Attorney General Rob Bonta today released a package of proposed regulations implementing Assembly Bill 488 (AB 488), a new law governing charitable fundraising on internet platforms. In recent years, charitable fundraising on internet platforms has grown exponentially, altering the landscape of charitable giving. The proposed regulations will allow the Attorney General to properly supervise charitable fundraising occurring on internet platforms and protect donors and charities from fraud and deceptive or unfair solicitations.

“When Californians open their hearts and their wallets, they deserve to have confidence that their donations are going toward their intended purposes,” said Attorney General Bonta. “The reality is: online solicitations are everywhere and charitable donations increasingly flow through crowdfunding sites and other third-party online platforms. AB 488 gives my office the tools we need to match today’s virtual market and safeguard charitable donations made through online platforms.”

AB 488, sponsored by Attorney General Bonta and authored by Assemblymember Jacqui Irwin, expands the Attorney General’s supervision of charities, charitable trustees, and fundraisers to include charitable fundraising platforms and platform charities. Charitable fundraising platforms include charitable crowdfunding websites, e-commerce companies that solicit donations for charities or engage in online charitable sales promotions, and companies that provide customizable versions of their fundraising platforms to charities. Platform charities are retained by charitable fundraising platforms, typically for the purpose of soliciting and receiving donations for other charitable organizations.

Under this new law, the Attorney General is required to adopt regulations necessary for supervising charitable fundraising on internet platforms. Today’s proposed regulations implement AB 488’s requirements that charitable fundraising platforms and platform charities:  

  • Register and report to the Attorney General’s Registry of Charitable Trusts, with filings made available for public viewing;
  • Provide conspicuous disclosures in certain solicitations, intended to prevent public deception, confusion, and misunderstanding;
  • Promptly issue tax donation receipts, when applicable;
  • Promptly distribute donations to charities;
  • Only solicit for charities that have provided prior consent, unless certain criteria are met that safeguard against harm to charities and the public; and
  • Only solicit for charities in good standing in California and with the IRS.

A copy of the proposed regulations can be found here. A virtual hearing on the proposed regulations will occur on Wednesday, July 13, 2022 at 9:00 am Pacific Time. A link to the public hearing can be found here. Media are encouraged to RSVP at agpressoffice@doj.ca.gov.

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Attorney General James Warns New Yorkers to Be Careful of Sham Charities Created in Response to Buffalo Terror Attack

New York Attorney General Letitia James today issued an alert urging New Yorkers to beware of potentially fraudulent charities created in the wake of the hate-filled terror attack in Buffalo. Anyone who is considering making a donation to organizations that are purportedly assisting victims of the shooting should consult the office’s charitable giving tips before donating. Scammers often use incidents of crisis to perpetuate frauds to divert donations away from the intended recipients.

“In the wake of tragedies, like the horrific shooting in Buffalo, scammers often take advantage of acts of kindness for personal gain,” said Attorney General James. “As New Yorkers from every corner of the state show their support and solidarity with the Buffalo community, I urge them to be careful of sham charities and make sure they give to trustworthy organizations and groups. I join the whole Buffalo community and the entire state of New York in mourning this senseless, hate-filled act of terror.”

Attorney General James offers the following tips for those donating to those impacted by the Buffalo shooting:  

  • Check Before Giving. Donate to charities you are familiar with and carefully review information about the charity before you give. Most charities are required to register and file financial reports with the Office of the Attorney General’s Charities Bureau if they solicit contributions from New Yorkers. Check our website, charitiesnys.com, for financial reports of charities or ask the charity directly for its reports. 
     
  • Ask How Your Donation Will Be Used. Find out how the charity plans to use your donation, including the services and individuals your donation will support. Find out more than just the cause. Find out what organization or entity will receive the money and what programs it conducts or what services it provides.
     
  • Look Into Newly Formed Organizations Carefully. Often, in the aftermath of tragedies, new organizations emerge to meet community needs. While most of these organizations are well-intentioned, and some may provide innovative forms of assistance, some may not have the experience or infrastructure to follow through on their promises, and some may turn out to be scams. 
     
  • Solicited by Email? Find Out Who is Soliciting. If you receive a solicitation by email, find out who is behind that email address. Contact the charity whose name is in the email or visit its website to find out if the email is really from the charity. Do not give personal information or your credit card number in response to an email solicitation unless you have checked out the charity. 
     
  • Be Careful When Giving Through Social Media or Other Fundraising Sites. Before giving through these social media or fundraising sites, research the identity of the organizer of the fundraising efforts and ask the same questions you would of a charity. Online platforms that host groups and individuals soliciting for causes may not thoroughly vet those who use their service. Donors should only give to campaigns conducted by people whom they know. Donors also should take a close look at the site’s FAQs and Terms and Conditions to see what fees will be charged. Also, don’t assume that charities recommended on social media sites, blogs, or other websites have already been vetted. Research the charity yourself to confirm that the charity is aware of the campaign and has given its approved permission for the use of its name or logo. If available, sign up for updates from the campaign organizer to keep abreast on how contributions to the campaign are being spent. 
     
  • Exercise Caution Before You Text A Contribution. Check the charity’s website or call the charity to confirm it has authorized contributions to be made via text message. 
     
  • Don’t Give Cash. Give directly to the charity either by check made payable to the organization or through the charity’s website. 
     
  • Be Careful About Personal Information. Be cautious before giving out credit card or personal information over the phone, by text message, or via the internet. In all cases, make sure you are familiar with the organization to which you give such information and check to see that the fundraising campaign is legitimate.
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Attorney General’s Charitable Trusts Unit Objects to the Proposed Merger Transaction Involving Dartmouth Health and GraniteOne Health

Attorney General John M. Formella announces the release of the report of the Charitable Trusts Unit objecting to the proposed merger transaction involving GraniteOne Health and Dartmouth Health.

“Free, fair and robust competition is critical to providing employers and patients with options for lower cost and high quality health care services,” said Attorney General Formella. “Our state has experienced significant consolidation in health care over the past several years, and this transaction seeking to combine two of our top four largest systems is unacceptable without appropriate protections for consumers in place.”

The Attorney General worked tirelessly for many months with both systems to arrive at a resolution in the public’s interest. As part of these discussions, the Attorney General proposed remedies that are consistent with remedies used in similar transactions around the country. At this point, despite significant time working with these health care providers to try and find a solution, no agreement has been reached that would satisfy the State’s concerns.

“New Hampshire consumers already pay exceptionally high prices for health care,” said Attorney General Formella. “Our duty is to protect the public and we will use all enforcement tools available to us to do so. Considerable diligence was put forth to reach common ground with both health care systems. Without remedies in place protecting the public from harm and ensuring the combined system delivers on the promised benefits, the transaction as proposed is not something that I can approve.”

The proposal as currently structured would have consolidated two competing health care systems with many hospitals, physician practices and outpatient services, resulting in a single system ultimately to be controlled by Dartmouth Health.

Before the type of transaction involved in this case may take place, New Hampshire law requires the Charitable Trusts Unit to review the proposal and determine whether, among other requirements, the transaction is permitted by applicable law. The Attorney General objects to the combination because the transaction, as proposed, fails this primary requirement.

Part 2, Article 83 of the New Hampshire Constitution requires “free and fair competition in the trades and industries.” In addition, RSA 356, the State’s Antitrust law, and RSA 358-A, the Consumer Protection Act, all protect free and fair competition. After a fact intensive review by the Consumer Protection and Antitrust Bureau, the Attorney General has concluded that the completion of this proposed transaction would violate the law.

Specifically, the transaction, as proposed, would end the existing competition between the two systems that consumers rely on in several health care markets served by both GraniteOne and Dartmouth Health today and, therefore, would violate state and federal law without sufficient remedies to address the anticompetitive harm.

More than ten years ago, Dartmouth-Hitchcock Health attempted to acquire Catholic Medical Center in Manchester, New Hampshire, which is currently GraniteOne’s flagship hospital. In 2010, the Charitable Trusts Unit issued a public report objecting to the transaction, and the parties ultimately decided to abandon the deal.

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Attorney General Ellison secures agreement to strengthen governance of charity serving Cameroonian community

Minnesota Attorney General Keith Ellison today announced that his office has reached an agreement with Minnesota Cameroon Community (“MCC”) related to past neglect of the organization’s primary asset, the Cameroon Community Center. The Assurance of Discontinuance filed in Ramsey County District Court alleges that the directors’ and officers’ inattentiveness and governance violations allowed this important community asset to fall into disrepair.

“Part of my job as Attorney General is to ensure that nonprofit assets are maintained well and nonprofits are governed well,” Attorney General Ellison said. “The Cameroon Community Center is a vital Minnesota resource, but through poor governance, MCC allowed the center to fall into disrepair. All directors and officers have duties to protect nonprofit assets and prevent waste and disrepair. The Charities Division of my Office will keep ensuring that charities provide all the oversight over their operations and assets that the law requires.”

After an investigation by the Charities Division, Attorney General Ellison alleged in the Assurance that MCC’s directors and officers breached their fiduciary duties by neglecting to appropriately manage the Cameroon Community Center. MCC’s directors and officers allowed the community center to deteriorate, failed to properly insure it, and failed to pay outstanding tax liabilities. MCC also failed to use charitable assets in accordance with donor intent when it fundraised specifically to pay MCC’s tax liabilities but failed to use all the funds for that purpose. MCC’s leadership also failed to register the organization with the Minnesota Attorney General’s Office as required by Minnesota law.

Under the terms of the Assurance, MCC will restructure its leadership so that a singular board controls the business and affairs of the organization, instead of its prior fragmented governance structure. MCC must also maintain and comply with internal financial management practices developed in consultation with appropriate professionals, and adopt a conflict-of-interest, whistleblower, and document-retention policy. MCC is also required to properly maintain and insure MCC’s physical property, obtain all necessary licensures, and timely pay all taxes. MCC’s directors and officers are further required to properly maintain all books and records of the organization and adopt policies to ensure that funds are properly spent on the purposes for which they were given.

The Minnesota Attorney General’s Office makes available a number of publications and pamphlets providing information about charitable organizations, charitable trusts, professional fundraisers, and nonprofit organizations generally:

  • “Guide for Board Members” covers fiduciary duties of directors of nonprofit corporations and is meant to assist board members with the important responsibilities they assume when elected to a charity’s board of directors.
  • “A Guide to Minnesota’s Charities Laws” discusses key laws including the Minnesota Nonprofit Corporation Act, the Charitable Solicitation Act, and the Supervision of Charitable Trusts and Trustees Act, among other laws that require certain organizations to register with and provide notice to the Minnesota Attorney General’s Office.
  • “Nonprofit Organization Resources” contains a listing of resources covering charitable solicitation, professional fundraiser, and charitable trust registration, government agency contacts, and training and technical assistance providers.