California State Senate Advances AG-Sponsored Bill to Provide Oversight and Protection of Online Charitable Donations

The California State Senate today approved Assembly Bill 488 (AB 488), a bill authored by Assemblymember Jacqui Irwin and sponsored by Attorney General Rob Bonta. AB 488 will ensure critical oversight byĀ the California Department of Justice over charitable fundraising that occurs on internet platforms. Over the years, charitable giving through internet platforms has increased exponentially, requiring an update to Californiaā€™s charitable giving laws. AB 488 will protect both donors and charities from deceptive or misleading solicitations by creating a framework that specifically defines online platform entities and requiresĀ them to register and report toĀ the Attorney Generalā€™s Registry of Charitable Trusts.

ā€œOn top of a national pandemic, our state has been greatly impacted by this yearā€™s wave of devastating wildfires. As Californians rise up to the occasion to help those in need, many will choose to makeĀ charitableĀ donations through internet platforms,ā€Ā said Attorney General Bonta. ā€œTo ensure my officeā€™s continued ability to protect the public, we need to be inĀ aĀ strongerĀ position to oversee online charitable fundraising practices. AB 488 will grant my office the ability toĀ properlyĀ supervise third-party internet platforms and ensure that donations made online go towards their intended purposes, which is especially important during this difficult time.ā€

ā€œI am pleased the State Senate voted overwhelmingly to approve AB 488,ā€Ā said Assemblymember Jacqui Irwin. ā€œAfter years of discussions and development with stakeholders, California is one step closer to securing the important oversight of the Attorney General that can provide every donor with the confidence that their donations are reaching charities and having an impact in their communities. In recent years donation trends have shifted, with hundreds of millions of dollars flowing through these online charitable fundraising platforms every year. With this new paradigm California must update its laws to provide the same level of oversight as traditional methods of fundraising.ā€

TheĀ California Department of JusticeĀ is responsible for regulatory supervision ofĀ charities, trustees, commercial fundraisers, and other legal entities that hold or solicit donations for charitable purposes.Ā In recent years, charitable fundraising on internet platforms has grown exponentially, altering the landscape of charitable giving beyond what current law contemplated. Internet companies have developed methods for individuals to donate to charities through websites and phone applications that serve as ā€œcharitable fundraising platforms.ā€ As currently written, Californiaā€™s solicitation laws do not specifically reach these online platforms, resulting in instances of deceit and mistreatment of charitable donations that the Attorney Generalā€™s Office is not able to address through enforcement ofĀ existing charity oversight laws.

If signed into law, AB 488 will:

  • Create a level playing field for all charitable giving platforms, regardless of business model, by defining two new groups of entities, ā€œcharitable fundraising platformsā€ and ā€œplatform charitiesā€ that are subject to theĀ Attorney Generalā€™s supervision;
  • Require covered entities to provide meaningful and transparent disclosures on their internet platforms, promptly distribute donations, and prohibit solicitations for charities not in good standing with the Attorney Generalā€™s Registry of Charitable Trusts;Ā 
  • Permit some instances of soliciting for a charity without prior consent if certain criteria that safeguard against harm to charities and the public are met; and
  • Authorize the Attorney Generalā€™s Office to implement regulations to require donor notification and reporting requirements, and to encourage transparency and accountability.

The text of AB 488 is availableĀ here.