PRINTER'S NO. 2399
No. 1716 Session of 1990
INTRODUCED BY RHOADES, JUNE 29, 1990
REFERRED TO STATE GOVERNMENT, JUNE 29, 1990
AN ACT
1 Providing for the registration and regulation of solicitations
2 by charitable organizations, professional fundraisers and
3 other solicitors; imposing additional powers on the
4 Department of State and the Office of Attorney General;
5 prescribing civil and criminal penalties; and making a
6 repeal.
7 TABLE OF CONTENTS
8 Section 1. Short title.
9 Section 2. Legislative intent.
10 Section 3. Definitions.
11 Section 4. Powers and duties of secretary.
12 Section 5. Registration of charitable organizations; financial
13 reports; fees; failure to file.
14 Section 6. Exemptions from registration.
15 Section 7. Short form registration.
16 Section 8. Registration of professional fundraising counsel,
17 and contracts.
18 Section 9. Registration of professional solicitors; contract
19 and disclosure requirements; bonds; records;
1 books.
2 Section 10. Contracts voidable by charitable organizations.
3 Section 11. Information filed to become public records.
4 Section 12. Records to be kept by charitable organizations,
5 professional fundraising counsels and
6 professional solicitors; inspection; retention.
7 Section 13. Limitation on activities of charitable
8 organizations; disclosure requirements.
9 Section 14. Reciprocal agreements.
10 Section 15. Prohibited acts.
11 Section 16. Investigation; subpoenas; injunctions; court
12 orders.
13 Section 17. Administrative enforcement and penalties.
14 Section 18. Criminal penalties.
15 Section 19. Civil penalties.
16 Section 20. Additional regulations by counties, municipalities
17 or consolidated government.
18 Section 21. Charitable organizations deemed fiduciary.
19 Section 22. Prior registration unaffected.
20 Section 23. Repeals.
21 Section 24. Appropriation.
22 Section 25. Effective date.
23 The General Assembly of the Commonwealth of Pennsylvania
24 hereby enacts as follows:
25 Section 1. Short title.
26 This act shall be known and may be cited as the Solicitation
27 of Funds for Charitable Purposes Act.
28 Section 2. Legislative intent.
29 It is the intention of the General Assembly that this act
30 shall not merely require proper registration of charitable
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1 organizations, professional fundraisers and professional
2 solicitors, but shall protect the citizens of this Commonwealth
3 by requiring full public disclosure of the identity of persons
4 who solicit contributions from the public, the purposes for
5 which such contributions are solicited and the manner in which
6 they are actually used, by promoting consumer education about
7 charitable concerns, and by providing civil and criminal
8 penalties for deception and dishonest statements and conduct in
9 the solicitation and reporting of contributions for or in the
10 name of charitable purposes, and by publicizing matters relating
11 to fraud, deception and misrepresentation perpetrated in the
12 name of charity. This act shall not be construed to be exclusive
13 in its purview and its application shall not operate as a bar or
14 otherwise prevent the contemporaneous or subsequent application
15 of any other relevant act or acts.
16 Section 3. Definitions.
17 The following words and phrases when used in this act shall
18 have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "Administrative costs." All management and general costs of
21 a charitable organization, not identifiable with a single
22 program or fundraising activity, but indispensable to the
23 conduct of such programs and activities and to an organization's
24 existence, including expenses for the overall direction of the
25 organization, business management, general record keeping,
26 budgeting, financial reporting and related activities, salaries,
27 rent, supplies, equipment and general overhead expenses.
28 "Affiliate." Any chapter, branch, auxiliary or other
29 subordinate unit of any charitable organization, howsoever
30 designated, whose policies, fundraising activities and
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1 expenditures are supervised or controlled by such parent
2 organization.
3 "Bureau." The Bureau of Charitable Organizations of the
4 Department of State.
5 "Charitable organization." Any person granted tax exempt
6 status under section 501(c)(3) of the Internal Revenue Code of
7 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)) or any person
8 who is or holds himself out to be established for any charitable
9 purpose or any person who in any manner employs a charitable
10 appeal as the basis of any solicitation or an appeal which has a
11 tendency to suggest there is a charitable purpose to any
12 solicitation. An affiliate of a charitable organization which
13 has its principal place of business outside this Commonwealth
14 shall be a charitable organization for the purposes of this act.
15 The term shall not be deemed to include:
16 (1) any bona fide duly constituted organization of law
17 enforcement personnel, firefighters or other persons who
18 protect the public safety whose stated purpose in the
19 solicitation does not include any benefit to any person
20 outside the actual active membership of the organization; and
21 (2) any bona fide duty constituted religious
22 institutions and such separate groups or corporations which
23 form an integral part of religious institutions, provided
24 that:
25 (i) such religious institutions, groups or
26 corporations are tax exempt pursuant to the Internal
27 Revenue Code of 1986;
28 (ii) no part of their net income inures to the
29 direct benefit of any individual; and
30 (iii) their conduct is primarily supported by
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1 government grants or contracts or funds solicited within
2 their own memberships or congregations, or fees charged
3 for services rendered.
4 "Charitable promotion." Any advertising or sales campaign,
5 event or performance, conducted, produced, promoted,
6 underwritten, arranged or sponsored by a commercial co-venturer,
7 which represents that the purchase or use of goods or services
8 or attendance at events or performances offered or sponsored by
9 the commercial co-venturer will benefit, in whole or in part, a
10 charitable organization or purpose.
11 "Charitable purpose." Any benevolent, educational,
12 philanthropic, humane, scientific, patriotic, social welfare or
13 advocacy, public health, environmental conservation, civic or
14 other eleemosynary objective, including an objective of any bona
15 fide duly constituted organization of law enforcement personnel,
16 firefighters or other persons who protect the public safety if a
17 stated purpose of the solicitation includes any benefit to any
18 person outside the actual active membership of the organization.
19 "Commercial co-venturer." Any person who for profit is
20 regularly and primarily engaged in trade or commerce other than
21 in connection with the raising of funds or any other thing of
22 value for a charitable organization and who advertises that the
23 purchase or use of goods, services, entertainment or any other
24 thing of value will benefit a charitable organization.
25 "Contribution." The promise, grant or pledge of money,
26 credit, property, financial assistance or other thing of any
27 kind or value in response to a solicitation, including the
28 payment or promise to pay in consideration of a performance,
29 event or sale of a good or service. Payment by members of an
30 organization for membership fees, dues, fines or assessments or
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1 for services rendered to individual members, if such fees, dues,
2 fines or assessments confer a bona fide right, privilege,
3 professional standing, honor or other direct benefit, shall not
4 be deemed contributions, provided that membership is not
5 conferred solely as consideration for making a contribution in
6 response to a solicitation. Government grants or contracts shall
7 not be deemed a contribution.
8 "Department." The Department of State of the Commonwealth.
9 "Federated fundraising organization." A federation of
10 independent charitable organizations which have voluntarily
11 joined together including, but not limited to, a United Way or
12 Community Chest, for purposes of raising and distributing money
13 for and among themselves and where membership does not confer
14 upon the federated group organization operating authority and
15 control of the individual agencies.
16 "Firefighters." Any person who is or represents or holds
17 itself out to represent, aid, train or otherwise benefit any
18 paid or volunteer firefighter, active or retired, or their
19 families.
20 "Fundraising costs." Those costs incurred in inducing others
21 to make contributions to a charitable organization for which the
22 contributors will receive no direct economic benefit.
23 Fundraising costs normally include, but are not limited to,
24 salaries, rent, acquiring and maintaining mailing lists,
25 printing, mailing and all direct and indirect costs of
26 soliciting, as well as the cost of unsolicited merchandise sent
27 to encourage contributions. Fundraising costs do not include the
28 direct cost of merchandise or goods sold or the direct cost of
29 fundraising dinners, bazaars, shows, circuses, banquets,
30 dinners, theater parties or any other form of benefit
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1 performances.
2 "Law enforcement personnel." Any person who is or represents
3 or holds itself out to represent, aid, train or otherwise
4 benefit any police officer, sheriff or deputy sheriff, constable
5 or deputy constable, county detectives, fire police, or any
6 other person who is empowered to make arrests, serve warrants,
7 issue summons or otherwise enforce the laws of this Commonwealth
8 to include retired law enforcement personnel and the families of
9 law enforcement personnel.
10 "Net proceeds." The total proceeds received from the
11 solicitation of contributions reduced by the direct cost of
12 merchandise or other goods sold or fundraising events of any
13 kind.
14 "Owner." Any person who has a direct or indirect interest in
15 any professional fundraising counsel or professional solicitor.
16 "Parent organization." That part of a charitable
17 organization which coordinates, supervises or exercises control
18 of policy, fundraising and expenditures, or assists or receives
19 funds from or advises one or more affiliates.
20 "Person." Any individual, organization, corporation,
21 association, partnership, trust, foundation or any other entity
22 however styled.
23 "Professional fundraising counsel." Any person who is
24 retained by a charitable organization for a fixed fee or rate
25 under a written agreement to plan, conduct, manage, carry on,
26 advise, consult or prepare material for or with respect to the
27 solicitation in this Commonwealth of contributions for a
28 charitable organization, but who does not solicit contributions
29 or employ, procure or engage any compensated person to solicit
30 contributions and who does not have custody or control of
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1 contributions. A bona fide salaried officer or regular,
2 nontemporary employee of a charitable organization maintaining a
3 permanent establishment within this Commonwealth shall not be
4 deemed to be a professional fundraising counsel provided that
5 the individual is not employed or engaged as professional
6 fundraising counsel or as a professional solicitor by any other
7 person.
8 "Professional solicitor." Any person who is retained for
9 financial or other consideration by a charitable organization to
10 solicit in this Commonwealth contributions for charitable
11 purposes directly or in the form of payment for goods, services
12 or admission to fundraising events, whether such solicitation is
13 performed personally or through his agents, servants or
14 employees or through agents, servants or employees especially
15 employed by or for a charitable organization who are engaged in
16 the solicitation of contributions, the sale of goods or services
17 or the production of fundraising events under the direction of
18 such person, or a person who plans, conducts, manages, carries
19 on, advises, consults, whether directly or indirectly, in
20 connection with the solicitation of contributions, sale of goods
21 or services or the production of fundraising events for or on
22 behalf of any charitable organization, but does not qualify as a
23 "professional fundraising counsel" within the meaning of this
24 act. A person who is otherwise a professional fundraising
25 counsel shall be deemed a professional solicitor if his
26 compensation is related to the amount of contributions received.
27 A bona fide salaried officer or regular, nontemporary employee
28 of a charitable organization maintaining a permanent
29 establishment within this Commonwealth shall not be deemed to be
30 a professional solicitor provided that the individual is not
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1 employed or engaged as professional fundraising counsel or as a
2 professional solicitor by any other person.
3 "Secretary." The Secretary of the Commonwealth.
4 "Solicitation." Any direct or indirect request for a
5 contribution on the representation that such contribution will
6 be used in whole or in part for a charitable purpose including,
7 but not limited to, any of the following:
8 (1) Any oral request that is made in person, by
9 telephone, radio or television or other advertising or
10 communication media.
11 (2) Any written or otherwise recorded or published
12 request that is mailed, sent, delivered, circulated,
13 distributed, posted in a public place or advertised or
14 communicated by press, telegraph, television or any other
15 media.
16 (3) Any sale of, offer or attempt to sell any
17 advertisement, advertising space, sponsorship, book, card,
18 chance, coupon, device, food, magazine, merchandise,
19 newspaper, subscription, ticket or other service or tangible
20 good, thing or item of value.
21 (4) Any announcement requesting the public to attend an
22 appeal, assemblage, athletic or competitive event, carnival,
23 circus, concert, contest, dance, entertainment, exhibition,
24 exposition, game, lecture, meal, party, show, social
25 gathering or other performance or event of any kind.
26 Section 4. Powers and duties of secretary.
27 The secretary shall have the following powers and duties to:
28 (1) Provide for and regulate the registration of
29 charitable organizations, professional fundraising counselors
30 and professional solicitors.
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1 (2) Decide matters relating to the issuance, renewal,
2 suspension or revocation of registration.
3 (3) Promulgate, adopt and enforce the rules and
4 regulations necessary to carry out this act.
5 (4) Promulgate regulations altering fees and fines
6 established in this act sufficient to meet expenditures of
7 the bureau.
8 (5) Take appropriate action to initiate any civil or
9 criminal proceedings necessary to enforce this act, in
10 accordance with the act of October 15, 1980 (P.L.950,
11 No.164), known as the Commonwealth Attorneys Act.
12 (6) Conduct hearings and make adjudications.
13 (7) Keep a record showing the names and addresses of all
14 registered charitable organizations, professional fundraising
15 counsel and professional solicitors.
16 (8) Submit annually, on or before September 30, to the
17 Governor, to the State Government Committees of the House of
18 Representatives and Senate, as well as to interested parties,
19 a report on the number of registered charities, the number of
20 charities ordered to cease and desist solicitation, the
21 number of charities contracting with professional solicitors
22 and the compensation of professional solicitors for each
23 solicitation campaign in relation to the funds raised and
24 administrative costs.
25 (9) Delegate to a division director of his office such
26 powers and duties under this act as he may deem appropriate.
27 (10) Exercise all other authority accorded to him by
28 this act.
29 Section 5. Registration of charitable organizations; financial
30 reports; fees; failure to file.
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1 (a) Registration and approval required.--A charitable
2 organization, unless exempted from registration requirements
3 pursuant to section 6, shall file a registration statement with
4 the department. This statement must be refiled annually within
5 135 days after the close of its fiscal year in which the
6 charitable organization was engaged in solicitation activities.
7 The department shall review the statement pursuant to section
8 5(r). No charitable organization shall solicit contributions or
9 have contributions solicited in its behalf before approval of
10 its registration statement by the department.
11 (b) Filing of statement.--It shall be the duty of the
12 president, chairman or principal officer of each charitable
13 organization to file the registration statement, financial
14 report and fee required under this section. The registration
15 statement shall be sworn to by two authorized officers,
16 including the chief fiscal officer of the organization, and
17 shall contain all of the following information:
18 (1) The name of the organization and any other name or
19 names under which it intends to solicit contributions.
20 (2) The principal address and telephone number of the
21 organization and the addresses and telephone numbers of any
22 offices in this Commonwealth. If the organization does not
23 maintain an office, the name and address of the individual
24 having custody of its financial records.
25 (3) The names and addresses of any affiliates which
26 share in the contributions or other revenue raised in this
27 Commonwealth.
28 (4) The names and addresses of the officers, directors
29 and trustees and the principal salaried executive staff
30 officers.
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1 (5) A copy of the financial report required under
2 subsection (e).
3 (6) A copy of any determination of the organization's
4 tax exempt status under the Internal Revenue Code of 1986
5 (Public Law 99-514) and, for organizations granted tax exempt
6 status under section 501(c)(3), a copy of the last filed
7 Internal Revenue Service Form 990 and Schedule A for every
8 charitable organization and parent organization.
9 (7) The date when the organization's fiscal year begins.
10 (8) Whether:
11 (i) the organization is authorized by any other
12 governmental authority to solicit contributions;
13 (ii) the organization or any of its present
14 officers, directors, executive personnel or trustees are
15 or have ever been enjoined in any jurisdiction from
16 soliciting contributions or have been found to have
17 engaged in unlawful practices in the solicitation of
18 contributions or administration of charitable assets;
19 (iii) the organization's registration or license has
20 been denied, suspended or revoked by any governmental
21 agency together with the reasons for such denial,
22 suspension or revocation; and
23 (iv) the organization has voluntarily entered into
24 an assurance of voluntary discontinuance or agreement
25 similar to that set forth in section 19(b) together with
26 a copy of that agreement.
27 (9) A clear description of the specific programs for
28 which contributions will be used and a statement whether such
29 programs are planned or in existence.
30 (10) The names and addresses of any professional
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1 solicitors, professional fundraising counsels and commercial
2 co-venturers who are acting or have agreed to act on behalf
3 of the organization.
4 (11) The names of the individuals or officers of the
5 organization who are in charge of any solicitation
6 activities, who will have final responsibility for the
7 custody of the contributions and who will be responsible for
8 the final distribution of the contributions.
9 (12) Whether any of the organization's officers,
10 directors, trustees or employees are related by blood,
11 marriage or adoption to each other or to any officers, agents
12 or employees of any professional fundraising counsel or
13 professional solicitor under contract to the organization or
14 to any supplier or vendor providing goods or services to the
15 organization, and the names and business and residence
16 addresses of any such related parties.
17 (13) Any other information required by the regulations
18 of the department.
19 (c) Additional filings.--With the initial registration only,
20 each charitable organization required to be registered shall
21 also file with the department the following documents:
22 (1) A copy of the organization's charter, articles of
23 organization, agreement of association, instrument of trust,
24 constitution or other organizational instrument and bylaws.
25 (2) A statement setting forth where and the date when
26 the organization was legally established, the form of its
27 organization and its tax-exempt status together with a copy
28 of the letter of exemption, if any, issued by the Internal
29 Revenue Service.
30 (d) Federal tax exemption determination.--Each charitable
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1 organization registered with the department shall file with the
2 department a copy of any Federal tax exemption determination
3 letter received after the initial registration within 30 days
4 after receipt, and any amendments to its organizational
5 instrument within 30 days after adoption.
6 (e) Financial report.--With each registration statement, a
7 charitable organization must file a financial report for the
8 immediately preceding fiscal year, which shall contain a balance
9 sheet and statements of revenue, expenses and changes in fund
10 balances indicating the organization's gross revenue, the amount
11 of funds received from solicitations or other fundraising
12 activities and all expenditures for supplies, equipment, goods,
13 services, programs, activities or other expenses, a detailed
14 list of all salaries and wages paid and expenses allowed to any
15 officer, or employee if the organization is not required to file
16 an Internal Revenue Service Form 990 and the disposition of the
17 net proceeds received from solicited contributions or other
18 fundraising activities.
19 (f) Audit of certain financial reports.--The financial
20 report of every charitable organization which received
21 contributions in excess of $100,000 shall be audited by an
22 independent public accountant. The financial report of every
23 charitable organization which receives contributions in excess
24 of $25,000, but less than $100,000 shall be reviewed or audited
25 by an independent public accountant. An audit or review is
26 optional for any charitable organization which receives
27 contributions less than $25,000. Audits shall be performed in
28 accordance with the Statement on Auditing Standards of the
29 American Institute of Certified Public Accountants and reviews
30 shall be performed in accordance with the Statement on Standards
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1 for Accounting and Review Services of the American Institute of
2 Certified Public Accountants.
3 (g) Governmental audits.--Government audits of government
4 grants shall be accepted and shall be included as part of the
5 financial statements.
6 (h) Other acceptable reports.--The Department may accept a
7 copy of a current financial report previously prepared by a
8 charitable organization for a governmental agency in another
9 jurisdiction in compliance with the laws of that jurisdiction,
10 provided that the report filed with such other governmental
11 agency shall be substantially similar in content to the report
12 required by this section.
13 (i) Reports to accompany audit.--Audited and reviewed
14 financial statements must be accompanied by the report prepared
15 and signed by the independent public accountant.
16 (j) Optional departmental action.--The department shall have
17 the discretion to require that an audit or review be submitted
18 by any charitable organization which files a registration
19 statement. The department shall also have the discretion to
20 accept the financial statement submitted by the organization in
21 lieu of an audit or review where special facts and circumstances
22 are presented.
23 (k) Time extension for filings.--For good cause shown, the
24 department may extend the time for the annual filing of a
25 registration statement or financial report for a period not to
26 exceed 180 days during which time the previous registration
27 remains in effect.
28 (l) Cancellation of registration.--In no event shall the
29 registration of a charitable organization continue in effect
30 after the date the organization should have filed, but failed to
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1 file, its financial report in accordance with this section. Such
2 organization shall not be eligible to file a new registration
3 statement until it shall have filed the required financial
4 report with the department.
5 (m) Reports by affiliates.--
6 (1) Each affiliate whose parent organization has its
7 principal place of business in this Commonwealth may
8 separately file the registration statement or financial
9 information required by this section, or report the required
10 information to its parent organization which shall then file
11 a combined registration statement and financial report for
12 its Pennsylvania affiliates. There shall be appended to each
13 combined report a schedule, containing such information as
14 may be prescribed in the regulations of the department,
15 reflecting the activities of each affiliate, which shall
16 contain a certification, under oath, by an official of the
17 organization, that the information contained therein is true.
18 The failure of a parent organization to file a combined
19 registration statement and financial report shall not excuse
20 either the parent organization or its affiliates from
21 complying with the requirements of this section.
22 (2) If an affiliate is soliciting in this Commonwealth
23 but its parent organization has its principal place of
24 business outside this Commonwealth, both the affiliate and
25 the parent organization shall independently comply with all
26 of the registration requirements of this section.
27 (n) Federated organizations.--An independent member agency
28 of a federated fundraising organization shall independently
29 comply with the provisions of this section unless specifically
30 exempted.
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1 (o) Retention of records, etc.--Each charitable organization
2 required to register shall maintain records, books and reports
3 for at least three years after the end of the period of
4 registration to which they relate, which shall be available for
5 inspection upon demand by the department and the Office of
6 Attorney General.
7 (p) Annual registration fees.--A charitable organization
8 which submits a short form registration statement pursuant to
9 section 7 or receives contributions of less than $25,000 during
10 the immediately preceding fiscal year shall pay an annual
11 registration fee of $15. A charitable organization which
12 receives contributions in excess of $25,000, but less than
13 $100,000 during the immediately preceding fiscal year shall pay
14 an annual registration fee of $50. A charitable organization
15 which receives contributions in excess of $100,000 during the
16 immediately preceding fiscal year shall pay an annual
17 registration fee of $100. A parent organization filing on behalf
18 of one or more affiliates and a federated fundraising
19 organization filing on behalf of it member agencies shall pay a
20 single annual registration fee for itself and such other
21 affiliates or member agencies included in the registration
22 statement.
23 (q) Late filing fees.--In addition to the registration fee,
24 an organization failing to file a registration application by
25 the due date shall pay an additional fee of $25 for each month
26 or part of the month after the date on which the registration
27 statement and financial report were due to be filed or after the
28 period of extension granted for such filing.
29 (r) Department review.--The department shall examine each
30 registration statement and supporting documents filed by a
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1 charitable organization and shall determine whether the
2 registration requirements are satisfied. If the department
3 determines that the registration requirements are not satisfied,
4 the department must notify the charitable organization within
5 ten working days of its receipt of the registration statement;
6 otherwise the registration statement is deemed to be approved.
7 Within seven days after receipt of a notification that the
8 registration requirements are not satisfied, the charitable
9 organization may request a hearing. The hearing must be held
10 within seven days of receipt of the request and a determination
11 must be rendered within three working days of the hearing.
12 Section 6. Exemptions from registration.
13 (a) General rule.--The following charitable organizations
14 shall be exempt from the registration requirements of this act:
15 (1) Educational institutions, the curricula of which in
16 whole or in part are registered with or approved by the
17 Department of Education, either directly or by acceptance of
18 accreditation by an accrediting body recognized by the
19 Department of Education; and any auxiliary associations,
20 foundations and support groups which are directly responsible
21 to educational institutions.
22 (2) Hospitals which are subject to regulation by the
23 Department of Health.
24 (3) A local post, camp, chapter or similarly designated
25 element or a county unit of such elements of:
26 (i) a bona fide veteran's organization which issues
27 charters to such local elements throughout this
28 Commonwealth;
29 (ii) a bona fide organization of volunteer firemen;
30 (iii) a bona fide ambulance association;
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1 (iv) a bona fide rescue squad association; or
2 (v) a bona fide auxiliary or affiliate of any
3 organization or association under subparagraph (i), (ii),
4 (iii) or (iv);
5 provided that all fundraising activities of an organization
6 or association under subparagraph (i), (ii), (iii), (iv) or
7 (v) are carried on by volunteers, members or an auxiliary or
8 affiliate thereof, and those volunteers, members or
9 affiliates receive no compensation directly or indirectly for
10 the fundraising activities.
11 (4) Public nonprofit library organizations which receive
12 financial aid from State and municipal governments and file
13 an annual fiscal report with the State Library System.
14 (5) Senior citizen centers which are nonprofit and
15 charitable and which have been granted tax-exempt status
16 under the Internal Revenue Code of 1986 (Public Law 99-514,
17 26 U.S.C. § 1 et. seq.), provided that all fundraising
18 activities are carried on by volunteers, members or officers
19 of the Senior Citizen Center and those volunteers, members or
20 officers receive no compensation directly or indirectly for
21 the fundraising activities.
22 (6) Bona fide parent/teacher associations or
23 parent/teacher organizations as recognized in a notarized
24 letter from the school district in which they are located.
25 (7) Any corporation established by an act of Congress of
26 the United States, that is required by Federal law to submit
27 annual reports of its activities to Congress containing
28 itemized accounts of all receipts and expenditures after
29 being fully audited by the Department of Defense.
30 (b) Effect of exemption.--Exemption from the registration
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1 requirements of this act shall in no way limit the applicability
2 of other provisions of the act to a charitable organization.
3 Section 7. Short form registration.
4 The following charitable organizations shall be required to
5 file short form annual registration statements with the
6 department:
7 (1) Persons or charitable organizations accepting
8 contributions for the relief of any individual specified by
9 name at the time of acceptance or solicitation when all of
10 the contributions collected without any deductions whatsoever
11 are turned over to the named beneficiary for his use;
12 provided that all contributions collected shall be held in
13 trust and shall be subject to the provisions of 20 Pa.C.S.
14 Ch. 71 (relating to trust estates). The secretary, the
15 Attorney General, any contributor or any person who provides
16 any goods or services for which funds are expressly or
17 implicitly solicited shall have the right to petition the
18 court of common pleas of the county in which the trust is
19 located for an accounting of all contributions. For purposes
20 of this paragraph, the trust shall be deemed to be located in
21 the county where the principal place of business of the
22 charitable organization is located. If a charitable
23 organization has its principal place of business outside this
24 Commonwealth, all of the following shall apply:
25 (i) If an affiliate is soliciting contributions
26 within this Commonwealth, the trust shall be deemed to be
27 located in the county where the principal place of
28 business of the affiliate is located.
29 (ii) If a person is soliciting contributions within
30 this Commonwealth, the trust shall be deemed to be
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1 located in the county where the principal place of
2 business or the residence of the person is located.
3 (iii) If there is no place of business or residence
4 within this Commonwealth, the trust shall be deemed to be
5 located in the county of Dauphin.
6 (2) Organizations which only solicit within the
7 membership of the organization by the members of the
8 organization; provided that the term "membership" shall not
9 include those persons who are granted a membership solely
10 upon making a contribution as the result of solicitation. For
11 the purpose of this paragraph, "member" means a person having
12 membership in a nonprofit corporation, or other organization,
13 in accordance with the provisions of its articles of
14 incorporation, bylaws or other instruments creating its form
15 and organization and having bona fide rights and privileges
16 in the organization such as the right to vote, to elect
17 officers and directors, to hold office or position as
18 ordinarily conferred on members of such organizations.
19 (3) Charitable organizations whose fundraising
20 activities are carried on by volunteers, members, officers or
21 permanent employees and which do not receive contributions in
22 excess of $25,000 during a fiscal year, if no part of their
23 assets or income inures to the benefit of or is paid to any
24 officer or member, professional fundraising counsel,
25 professional solicitor or commercial co-venturer. Charitable
26 organizations which do not intend to solicit and receive in
27 excess of $25,000, but do receive contributions in excess of
28 that amount shall file the financial report required in
29 section 5 within 30 days after contributions are received in
30 excess of that amount.
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1 Section 8. Registration of professional fundraising counsel,
2 and contracts.
3 (a) Registration and approval required.--No person shall act
4 as a professional fundraising counsel before obtaining
5 department approval of a registration statement pursuant to
6 subsection (c) or after the expiration, suspension or revocation
7 of such registration. A registration application shall be signed
8 and sworn to by the principal officer of the professional
9 fundraising counsel and shall contain all of the following
10 information:
11 (1) The address of the principal place of business of
12 the applicant and any Pennsylvania addresses, if the
13 principal place of business is located outside this
14 Commonwealth.
15 (2) The form of the applicant's business.
16 (3) The names and residence addresses of all principals
17 of the applicant, including all officers, directors and
18 owners.
19 (4) Whether any of the owners, directors, officers or
20 employees of the applicant are related by blood, marriage or
21 adoption to any other directors, officers, owners or
22 employees of the applicant, any officer, director, trustee or
23 employee of any charitable organization under contract to the
24 applicant or any supplier or vendor providing goods or
25 services to any charitable organization under contract to the
26 applicant.
27 (5) The name of any person who is in charge of any
28 solicitation activity.
29 (b) Registration fee.--The application for registration
30 shall be accompanied by a fee of $100. A professional
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1 fundraising counsel which is a partnership or corporation may
2 register for and pay a single fee on behalf of all of its
3 partners, members, officers, directors, agents and employees.
4 Each registration shall be valid for one year and may be renewed
5 for additional one-year periods upon application to the
6 department and payment of the registration fee.
7 (c) Department review.--The department shall examine each
8 registration statement and supporting documents filed by a
9 professional fundraising counsel and shall determine whether the
10 registration requirements are satisfied. If the department
11 determines that the registration requirements are not satisfied,
12 the department must notify the professional fundraising counsel
13 within ten working days of its receipt of its registration
14 statement; otherwise the registration statement is deemed to be
15 approved. Within seven days after receipt of a notification that
16 the registration requirements are not satisfied, the
17 professional fundraising counsel may request a hearing. The
18 hearing must be held within seven days of receipt of the request
19 and a determination must be rendered within three working days
20 of the hearing.
21 (d) Written contract.--There shall be a written contract
22 between a charitable organization and a professional fundraising
23 counsel which shall be filed by the professional fundraising
24 counsel with the department at least ten working days prior to
25 the performance by the professional fundraising counsel of any
26 service. No solicitation pursuant to the contract shall begin
27 before the department has approved the contract pursuant to
28 subsection (e). The contract must be signed by two authorized
29 officials of the charitable organization, one of whom must be a
30 member of the organization's governing body, and the authorized
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1 contracting officer for the professional fundraising counsel.
2 The contract shall contain all of the following provisions:
3 (1) A statement of the charitable purpose for which the
4 solicitation campaign is being conducted.
5 (2) A statement of the respective obligations of the
6 professional fundraising counsel and the charitable
7 organization.
8 (3) A clear statement of the fees which will be paid to
9 the professional fundraising counsel.
10 (4) The effective and termination dates.
11 (5) A statement that the professional fundraising
12 counsel will not at any time have custody of contributions.
13 (6) Any other information required by the regulations of
14 the department.
15 (e) Department review.--The department shall examine each
16 contract filed by a professional fundraising counsel and shall
17 determine whether the contract contains the required
18 information. If the department determines that the requirements
19 are not satisfied, the department must notify the professional
20 fundraising counsel within ten working days of its receipt of
21 the contract; otherwise the contract is deemed to be approved.
22 Within seven days after receipt of a notification that the
23 requirements are not satisfied, the professional fundraising
24 counsel may request a hearing. The hearing must be held within
25 seven days of receipt of the request and a determination must be
26 rendered within three working days of the hearing.
27 Section 9. Registration of professional solicitors; contract
28 and disclosure requirements; bonds; records;
29 books.
30 (a) Registration and approval required.--No person shall act
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1 as a professional solicitor before obtaining department approval
2 of a registration statement pursuant to subsection (d) or after
3 the expiration, suspension or revocation of such registration. A
4 registration application shall be signed and sworn to by the
5 principal officer of the professional solicitor, and shall
6 contain all of the following information:
7 (1) The address of the principal place of business of
8 the applicant and any Pennsylvania addresses, if the
9 principal place of business is located outside this
10 Commonwealth.
11 (2) The form of the applicant's business.
12 (3) The names and residence addresses of all principals
13 of the applicant, including all officers, directors and
14 owners.
15 (4) Whether any of the owners, directors, officers or
16 employees of the applicant are related by blood, marriage or
17 adoption to any other directors, officers, owners or
18 employees of the applicant, any officer, director, trustee or
19 employee of any charitable organization under contract to the
20 applicant or any supplier or vendor providing goods or
21 services to any charitable organization under contract to the
22 applicant.
23 (5) The name of all persons in charge of any
24 solicitation activity.
25 (b) Registration fee.--The application for registration
26 shall be accompanied by a fee of $100. A professional solicitor
27 which is a partnership or corporation may register for and pay a
28 single fee on behalf of all of its partners, members, officers,
29 directors, agents and employees. Each registration shall be
30 valid for one year and may be renewed for additional one-year
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1 periods upon application to the department and payment of the
2 registration fee.
3 (c) Bond.--A professional solicitor shall, at the time of
4 making application for registration and renewal of registration,
5 file with and have approved by the department a bond, in which
6 it shall be the principal obligor in the sum of $25,000, or a
7 greater amount as prescribed by the regulations of the
8 department and which shall have one or more sureties
9 satisfactory to the department whose liability in the aggregate
10 as such sureties will at least equal that sum and maintain the
11 bond in effect as long as the registration is in effect. The
12 bond shall run to the Commonwealth for use of the secretary,
13 Attorney General and any person who may have a cause of action
14 against the obligor for any losses resulting from malfeasance,
15 nonfeasance or misfeasance in the conduct of solicitation
16 activities. A professional solicitor which is a partnership or
17 corporation may file one $25,000 bond or an amount specified by
18 regulation of the department on behalf of all its partners,
19 members, officers, directors, agents and employees.
20 (d) Department review.--The department shall examine each
21 registration statement and supporting documents filed by a
22 professional solicitor and shall determine whether the
23 registration requirements are satisfied. If the department
24 determines that registration requirements are not satisfied, the
25 department must notify the professional solicitor within ten
26 working days of its receipt of its registration statement;
27 otherwise the registration statement is deemed to be approved.
28 Within seven days after receipt of a notification that the
29 regulation requirements are not satisfied, the professional
30 solicitor may request a hearing. The hearing must be held within
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1 seven days of receipt of the request and a determination must be
2 rendered within three working days of the hearing.
3 (e) Contract filing.--No less than ten working days prior to
4 the commencement of each solicitation campaign, a professional
5 solicitor shall file with the department a copy of the contract
6 described in subsection (f) and a written solicitation notice.
7 No solicitation pursuant to the contract shall begin before the
8 department has approved the contract pursuant to subsection (g).
9 The solicitation notice shall be accompanied by a fee of $25,
10 shall be signed and sworn to by the authorized contracting
11 officer for the professional solicitor and shall contain all of
12 the following information:
13 (1) A description of the solicitation event or campaign.
14 (2) Each location and telephone number from which the
15 solicitation is to be conducted.
16 (3) The legal name and resident address of each person
17 responsible for directing and supervising the conduct of the
18 campaign and each person who is to solicit during such
19 campaign.
20 (4) A statement as to whether the professional solicitor
21 will at any time have custody of contributions.
22 (5) The account number and location of each bank account
23 where receipts from the campaign are to be deposited.
24 (6) Full and fair description of the charitable program
25 for which the solicitation campaign is being carried out.
26 (7) Any other information required by the regulations of
27 the department.
28 (f) Written contract.--There shall be a written contract
29 between a professional solicitor and a charitable organization
30 for each solicitation campaign which shall be signed by two
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1 authorized officials of the charitable organization, one of whom
2 must be a member of the organization's governing body, and the
3 authorized contracting officer for the professional solicitor
4 and which shall contain all of the following provisions:
5 (1) A statement of the charitable purpose for which the
6 solicitation campaign is being conducted.
7 (2) A statement of the respective obligations of the
8 professional solicitor and the charitable organization.
9 (3) A statement of the guaranteed minimum percentage of
10 the gross receipts from contributions which will be remitted
11 to the charitable organization, if any, or, if the
12 solicitation involves the sale of goods, services or tickets
13 to a fundraising event, the percentage of the purchase price
14 which will be remitted to the charitable organization, if
15 any. Any stated percentage shall exclude any amount which the
16 charitable organization is to pay as fundraising costs.
17 (4) A statement of the percentage of the gross revenue
18 which the professional solicitor will be compensated. If the
19 compensation of the professional solicitor is not contingent
20 upon the number of contributions or the amount of revenue
21 received, his compensation shall be expressed as a reasonable
22 estimate of the percentage of the gross revenue, and the
23 contract shall clearly disclose the assumptions upon which
24 the estimate is based. The stated assumptions shall be based
25 upon all of the relevant facts known to the professional
26 solicitor regarding the solicitation to be conducted by the
27 professional solicitor.
28 (5) The effective and termination dates of the contract.
29 (6) Any other information required by the regulations of
30 the department.
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1 (g) Department review.--The department shall examine each
2 contract and solicitation notice filed by a professional
3 solicitor and shall determine whether the contract and notice
4 contain the required information. If the department determines
5 that the requirements are not satisfied, the department must
6 notify the professional solicitor within ten working days of its
7 receipt of the contract and notice; otherwise the contract and
8 notice are deemed to be approved. Within seven days after
9 receipt of a notification that the requirements are not
10 satisfied, the professional solicitor may request a hearing. The
11 hearing must be held within seven days of receipt of the request
12 and a determination must be rendered within three working days
13 of the hearing.
14 (h) Required disclosures.--Prior to orally requesting a
15 contribution or contemporaneously with a written request for a
16 contribution, a professional solicitor shall be responsible for
17 clearly and conspicuously disclosing:
18 (1) The name of the professional solicitor as on file
19 with the department and that the solicitation is being
20 conducted by a professional solicitor who is being paid for
21 his services.
22 (2) If the individual acting on behalf of the
23 professional solicitor identifies himself by name, the
24 individual's legal name.
25 (3) The name of the charitable organization and a
26 description of how the contributions raised by the
27 solicitation will be utilized for a charitable purpose, or if
28 there is no charitable organization, a description as to how
29 the contributions raised by the solicitation will be utilized
30 for a charitable purpose.
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1 (i) Responses.--Any responses given by or on behalf of a
2 professional solicitor to an oral or written request for
3 information shall be truthful.
4 (j) Information on disclosure.--In the case of a
5 solicitation campaign conducted orally, whether by telephone or
6 otherwise, any written confirmation or receipt or reminder sent
7 to any person who has contributed or has pledged to contribute,
8 shall include a clear and conspicuous disclosure of the
9 information required by subsection (h).
10 (k) Notice.--In addition to the information required by
11 subsection (j), any written confirmation, receipt or reminder of
12 a contribution made pursuant to an oral solicitation and any
13 written solicitation shall conspicuously state:
14 "A copy of the official registration and financial
15 information may be obtained from the Pennsylvania
16 Department of State by calling toll free, within
17 Pennsylvania, 1 (800) 000-0000. Registration does not
18 imply endorsement."
19 (l) Financial reports.--Within 90 days after a solicitation
20 campaign has been completed, and on the anniversary of the
21 commencement of a solicitation campaign lasting more than one
22 year, a professional solicitor shall file with the department a
23 financial report for the campaign, including gross revenue and
24 an itemization of all expenses incurred. This report shall be
25 signed and sworn to by the authorized contracting agent for the
26 professional solicitor and two authorized officials of the
27 charitable organization.
28 (m) Retention of records, etc.--A professional solicitor
29 shall maintain during each solicitation campaign and for not
30 less than three years after the completion of such campaign the
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1 following records, which shall be available for inspection upon
2 demand by the department or the Office of Attorney General:
3 (1) The date and amount of each contribution received
4 and the name and address of each contributor.
5 (2) The name and residence of each employee, agent or
6 other person involved in the solicitation.
7 (3) Records of all revenue received and expenses
8 incurred in the course of the solicitation campaign.
9 (4) The location and account number of each bank or
10 other financial institution account in which the professional
11 solicitor has deposited revenue from the solicitation
12 campaign.
13 (n) Records from ticket sales.--If the professional
14 solicitor sells tickets to an event and represents that tickets
15 will be donated for use by another, the professional solicitor
16 shall maintain, for not less than three years after the
17 completion of such event, the following records, which shall be
18 available for inspection upon demand by the department or the
19 Office of Attorney General:
20 (1) The number of tickets purchased and donated by each
21 contributor.
22 (2) The name and address of all organizations receiving
23 donated tickets for use by others, including the number of
24 tickets received by each organization.
25 (o) Deposit of contributions.--Each contribution in the
26 control or custody of the professional solicitor shall, in its
27 entirety and within five days of its receipt, be deposited in an
28 account at a bank or other federally insured financial
29 institution. The account shall be in the name of the charitable
30 organization with whom the professional solicitor has contracted
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1 and the charitable organization shall have sole control over all
2 withdrawals from the account.
3 (p) Updating of information.--Any material change in any
4 information filed with the department pursuant to this section
5 shall be reported in writing by the professional solicitor to
6 the department not more than seven days after such change
7 occurs.
8 (q) Restrictions.--No person may act as a professional
9 solicitor if such person, any officer or director thereof, any
10 person with a controlling interest therein, or any person the
11 professional solicitor employs, engages or procures to solicit
12 for compensation, has been convicted by a court of any state or
13 the United States of any felony, or of any misdemeanor involving
14 dishonesty or arising from the conduct of a solicitation for a
15 charitable organization or purpose.
16 Section 10. Contracts voidable by charitable organizations.
17 (a) Contracts with registered groups.--No professional
18 fundraising counsel or professional solicitor shall contract
19 with a charitable organization unless such professional
20 fundraising counsel or professional solicitor is registered with
21 the department. A contract with an unregistered professional
22 fundraising counsel or professional solicitor shall be voidable
23 at the option of the charitable organization.
24 (b) Cancellation of contract.--Whenever a charitable
25 organization contracts with a professional fundraising counsel
26 or professional solicitor, the charitable organization shall
27 have the right to cancel the contract without cost, penalty or
28 liability for a period of ten days following the date on which
29 that contract is executed. Any provision in the contract that is
30 intended to waive this right of cancellation shall be void and
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1 unenforceable.
2 (c) Manner of cancellation.--A charitable organization may
3 cancel a contract pursuant to subsection (b) by a written notice
4 of cancellation. If mailed, cancellation shall be deemed
5 effective when deposited with the United States Postal Service,
6 properly addressed and postage prepaid. The notice shall be
7 sufficient if it indicates that the charitable organization does
8 not intend to be bound by the contract.
9 (d) Cancellation notice to department.--Whenever a
10 charitable organization cancels a contract pursuant to the
11 provisions of this section, it shall mail a duplicate copy of
12 the notice of cancellation to the department.
13 (e) Status of funds after cancellation.--Any funds collected
14 after a contract has been canceled shall be deemed to be held in
15 trust for the benefit of the charitable organization without
16 deduction for cost or expenses of any nature. A charitable
17 organization shall be entitled to recover all funds collected
18 after the date of cancellation.
19 Section 11. Information filed to become public records.
20 Except as otherwise provided in section 12, registration
21 statements and applications, reports, notices, contracts or
22 agreements between charitable organizations and professional
23 fundraising counsel, professional solicitors and commercial co-
24 venturers, and all other documents and information required to
25 be filed under this act with the department shall become public
26 records in the office of the bureau and shall be open to the
27 general public at such time and under such conditions as the
28 department may prescribe.
29 Section 12. Records to be kept by charitable organizations,
30 professional fundraising counsels and
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1 professional solicitors; inspection; retention.
2 Every charitable organization, professional fundraising
3 counsel, and professional solicitor subject to the provisions of
4 this act shall, in accordance with the rules and regulations
5 prescribed by the department, keep true fiscal records as to its
6 activities in this Commonwealth as may be covered under this
7 act, in such form as will enable them accurately to provide the
8 information required under this act. Such records shall be made
9 available for inspection upon demand by the department or the
10 Office of Attorney General. However, names, addresses and
11 identities of contributors and amounts contributed by them shall
12 not be considered a matter of public record and, therefore,
13 shall not generally be made available for public inspection,
14 shall not be used for a purpose inconsistent with this act, and
15 shall be removed from the records in the custody of the
16 department at such time that such information is no longer
17 necessary for the enforcement of this act. Such records shall be
18 maintained for a period of at least three years after the end of
19 the period of registration to which they relate.
20 Section 13. Limitation on activities of charitable
21 organizations; disclosure requirements.
22 (a) Solicitation limitation.--A charitable organization may
23 only solicit contributions for the charitable purpose expressed
24 in solicitation for contributions or the registration statement
25 of the charitable organization and may only apply contributions
26 in a manner substantially consistent with that purpose.
27 (b) Solicitation disclosures.--A charitable organization
28 soliciting in this Commonwealth shall include all of the
29 following disclosures at the point of solicitation:
30 (1) Its identity and location and, if different, the
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1 name and address of the charitable organization on whose
2 behalf the solicitation is being conducted.
3 (2) If requested, the name, and address or telephone
4 number of a representative to whom inquiries could be
5 addressed.
6 (3) A full and fair description of the charitable
7 purpose or purposes for which the solicitation is being made,
8 and a source from which written information is available.
9 (4) If requested, the source from which a financial
10 statement may be obtained. Such financial statement shall be
11 consistent with the annual financial report requested under
12 section 5 and shall disclose assets, liabilities, fund
13 balances, revenue and expenses for the preceding fiscal year.
14 Expenses shall be separated into program services,
15 administrative costs and fundraising costs.
16 (c) Notice on printed solicitation.--On every printed
17 solicitation or written confirmation, receipt, or reminder of a
18 contribution, the following statement must be conspicuously
19 printed:
20 "A copy of the official registration and financial
21 information may be obtained from the Pennsylvania
22 Department of State by calling toll free, within
23 Pennsylvania, 1 (800) 000-0000. Registration does not
24 imply endorsement."
25 (d) Misrepresentation.--A charitable organization may not
26 misrepresent its purpose or nature, or the purpose or
27 beneficiary of a solicitation. A misrepresentation may be
28 accomplished by words or conduct or failure to disclose a
29 material fact.
30 (e) Control over fundraising activities.--A charitable
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1 organization must establish and exercise control over
2 fundraising activities conducted for its benefit, including
3 approval of all written contracts and agreements, and must
4 assure that fundraising activities are conducted without
5 coercion.
6 (f) Restrictions on certain contracts.--A charitable
7 organization shall not enter into any contract or agreement with
8 or employ any professional fundraising counsel or professional
9 solicitor unless that professional fundraising counsel or
10 professional solicitor is registered with the department.
11 (g) Registration with department required.--A charitable
12 organization shall not enter into any contract or agreement with
13 or raise any funds for any charitable organization required to
14 be registered pursuant to this act unless such charitable
15 organization is registered with the department.
16 Section 14. Reciprocal agreements.
17 The secretary may enter into reciprocal agreements with the
18 appropriate authority of any other state for the purpose of
19 exchanging information with respect to charitable organizations,
20 professional fundraising counsel and professional solicitors.
21 Pursuant to such agreements, the secretary may accept
22 information filed by a charitable organization, professional
23 fundraising counsel or professional solicitor with the
24 appropriate authority of another state in lieu of the
25 information required to be filed in accordance with this act, if
26 such information is substantially similar to the information
27 required under this act. The secretary may also grant exemptions
28 from the requirements for the filing of annual registration
29 statements with the department to charitable organizations
30 organized under the laws of another state having their principal
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1 place of business outside this Commonwealth whose funds are
2 derived principally from sources outside this Commonwealth and
3 which have been exempted from the filing of registration
4 statements by the statute under whose laws they are organized if
5 such state has a statute similar in substance to the provisions
6 of this act.
7 Section 15. Prohibited acts.
8 (a) General rule.--Regardless of a person's intent or the
9 lack of injury, the following acts and practices are prohibited
10 in the planning, conduct or execution of any solicitation or
11 charitable sales promotion:
12 (1) Operating in violation of, or failing to comply
13 with, any of the requirements of this act, regulations of the
14 department or an order of the secretary, or soliciting
15 contributions after registration with the department has
16 expired or has been suspended or revoked or soliciting
17 contributions prior to the solicitation notice and contract
18 having been approved by the department.
19 (2) Utilizing any unfair or deceptive acts or practices
20 or engaging in any fraudulent conduct which creates a
21 likelihood of confusion or of misunderstanding.
22 (3) Utilizing any representation that implies the
23 contribution is for or on behalf of a charitable
24 organization, or utilizing any emblem, device or printed
25 matter belonging to or associated with a charitable
26 organization without first being authorized in writing to do
27 so by the charitable organization.
28 (4) Utilizing a name, symbol or statement so closely
29 related or similar to that used by another charitable
30 organization or other person that the use thereof would tend
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1 to confuse or mislead a solicited person.
2 (5) Misrepresenting or misleading anyone in any manner
3 to believe that the person on whose behalf a solicitation or
4 charitable sales promotion is being conducted is a charitable
5 organization or that the proceeds of such solicitation or
6 charitable sales promotion will be used for charitable
7 purposes when such is not the fact.
8 (6) Misrepresenting or misleading anyone in any manner
9 to believe that any other person sponsors, endorses or
10 approves such solicitation or charitable sales promotion when
11 such other person has not given consent in writing to the use
12 of his name for these purposes.
13 (7) Misrepresenting or misleading anyone in any manner
14 to believe that goods or services have sponsorship, approval,
15 characteristics, ingredients, uses, benefits or qualities
16 that they do not have or that a person has a sponsorship,
17 approval, status, affiliation or connection that he does not
18 have.
19 (8) Utilizing or exploiting the fact of registration so
20 as to lead any person to believe that such registration in
21 any manner constitutes an endorsement or approval by the
22 Commonwealth. The use of the following statement shall not be
23 deemed a prohibited exploitation:
24 "A copy of the official registration and financial
25 information may be obtained from the Pennsylvania
26 Department of State by calling toll free, within
27 Pennsylvania, 1 (800) 000-0000. Registration does not
28 imply endorsement."
29 (9) Representing directly or by implication that a
30 charitable organization will receive an amount greater than
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1 the actual net proceeds reasonably estimated to be retained
2 by the charity for its use.
3 (10) With respect to solicitations by or on behalf of
4 law enforcement personnel, firefighters, or other persons who
5 protect the public safety, issuing, offering, giving,
6 delivering or distributing any honorary membership cards,
7 courtesy cards or similar cards, or any stickers, emblems,
8 plates or other such items which could be used for display on
9 a motor vehicle.
10 (11) (i) Soliciting for advertising to appear in a for-
11 profit publication which relates to, purports to relate
12 to, or which could reasonably be construed to relate to
13 any charitable purpose without making the following
14 disclosures at the time of solicitation:
15 (A) The publication is a for-profit, commercial
16 enterprise.
17 (B) True name of the solicitor and the fact that
18 the solicitor is a professional solicitor.
19 (C) The publication is not directly affiliated
20 or sponsored by any charitable organization.
21 (ii) Where a sale of advertising has been made, the
22 solicitor, prior to accepting any money for the sale,
23 shall present the purchaser with the same disclosures, in
24 written form and in conspicuous type.
25 (12) Representing that any part of the contributions
26 received will be given or donated to any other charitable
27 organization unless such organization has consented to the
28 use of its name prior to the solicitation. The written
29 consent shall be signed by any two authorized officers,
30 directors or trustees of the charitable organization.
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1 (13) Representing that tickets to events will be donated
2 for use by another, unless all of the following requirements
3 have been met:
4 (i) The charitable organization or professional
5 solicitor shall have commitments, in writing, from
6 charitable organizations stating that they will accept
7 donated tickets and specifying the number of tickets they
8 are willing to accept.
9 (ii) The charitable organization or professional
10 solicitor shall not solicit or accept more contributions
11 of donated tickets than the lesser of:
12 (A) the number of ticket commitments it has
13 received from charitable associations; or
14 (B) the total attendance capacity of the site of
15 the event.
16 (iii) A ticket commitment alone, as described in
17 this subsection, shall not constitute written consent to
18 use the organization's name in the solicitation campaign.
19 (b) Criteria to determine unfairness.--In determining
20 whether or not a practice is unfair, deceptive, fraudulent or
21 misleading under this section, definitions, standards or
22 interpretations relating thereto under the act of December 17,
23 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and
24 Consumer Protection Law, shall apply.
25 Section 16. Investigation; subpoenas; injunctions; court
26 orders.
27 (a) Permissible investigations.--The Attorney General, the
28 secretary or the district attorney may make or cause to be made
29 an investigation of any person as deemed necessary. In
30 conducting such investigation, he may:
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1 (1) Require or permit any person to file a statement in
2 writing, under oath or otherwise, as to all the facts and
3 circumstances concerning the matter to be investigated.
4 (2) Administer oaths or affirmations.
5 (3) Take testimony under oath.
6 (4) Require the attendance and testimony of witnesses
7 and the production of any books, accounts, papers, records,
8 documents, audits and files relating to any solicitation or
9 any practice subject to this act or the regulations of the
10 department.
11 (5) Issue subpoenas.
12 (6) Conduct private or public hearings.
13 (7) Examine witnesses and receive evidence during any
14 investigation or public or private hearings.
15 (b) Notice.--Notice of the time and place for the
16 examination of documentary material shall be given by the
17 Attorney General, the secretary or the district attorney at
18 least ten days prior to the date of such examination or taking
19 of testimony.
20 (c) Contents of notice.--Each notice shall:
21 (1) State the time and place for the taking of testimony
22 or the examination and the name and address of the person to
23 be examined, if known, and if the name is not known, a
24 general description sufficient to identify him or the
25 particular class or group to which he belongs.
26 (2) State the statute thereof, if any, of the alleged
27 violation which is under investigation and state the general
28 subject matter of the investigation.
29 (3) Describe the class or classes of documentary
30 material to be produced thereunder with reasonable
19900S1716B2399 - 41 -
1 specificity, so as fairly to indicate the material demanded.
2 (4) Prescribe a return date within which the documentary
3 material is to be produced.
4 (5) Identify the members of the Office of Attorney
5 General's staff, the secretary's staff or the district
6 attorney's staff to whom such documentary material is to be
7 made available for inspection and copying.
8 (d) Restrictions on notices.--No such notice shall contain
9 any requirement which would be unreasonable or improper if
10 contained in a subpoena duces tecum issued by a court of the
11 Commonwealth.
12 (e) Restriction on materials.--
13 (1) Except as provided in paragraph (2), any documentary
14 material or other information produced by any person pursuant
15 to this section shall not, unless otherwise ordered by any
16 court of competent jurisdiction for good cause shown, be
17 produced for inspection or copying by or be disclosed to any
18 person other than the authorized representative of the
19 Attorney General, the secretary or the district attorney
20 without the consent of the person who produced such material.
21 (2) Under such reasonable terms and conditions that the
22 Attorney General, secretary or the district attorney shall
23 prescribe, documentary material in paragraph (1) shall be
24 available for inspection and copying by the person who
25 produced such material or any duly authorized representative
26 of such person. The Attorney General, the secretary or the
27 district attorney or his duly authorized representative may
28 use such documentary material or copies thereof as he
29 determines necessary in the enforcement of this act,
30 including presentation in any subsequent administrative or
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1 judicial proceeding.
2 (f) Compliance.--Any person upon whom a notice is served
3 pursuant to this section shall comply with the terms thereof
4 unless otherwise provided by an order of court. Any person who
5 fails to appear, or with intent to avoid, evade, or prevent
6 compliance, in whole or in part, with any civil investigation
7 under this act, removes from any place, conceals, withholds, or
8 destroys, mutilates, alters, or by any other means falsifies any
9 documentary material in the possession, custody or control of
10 any person subject to any notice, or knowingly conceals any
11 relevant information, shall be assessed a civil penalty of not
12 more than $5,000. The Attorney General or the district attorney
13 may petition for an order of court for enforcement of this
14 section. Additionally, the secretary may take appropriate action
15 to petition for an order of court for the enforcement of this
16 section in accordance with the act of October 15, 1980 (P.L.950,
17 No.164), known as the Commonwealth Attorneys Act. Any
18 disobedience of any final order entered under this section by
19 any court shall be punished as contempt thereof.
20 (g) Service.--Service of a subpoena may be made in any one
21 of the following ways:
22 (1) Delivering a duly executed copy thereof to the
23 person to be served or to a partner or to any officer or
24 agent authorized by appointment or by law to receive service
25 of process on behalf of such person.
26 (2) Delivering a duly executed copy thereof to the
27 principal place of business in this Commonwealth of the
28 person to be served.
29 (3) Mailing by registered or certified mail a duly
30 executed copy thereof addressed to the person to be served at
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1 his principal place of business in this Commonwealth or if
2 said person has no place of business in this Commonwealth, to
3 the last address of such person known to the secretary.
4 (4) Any charitable organization, fundraising counsel, or
5 professional solicitor having its principal place of business
6 other than within this Commonwealth, or organized under and
7 by virtue of the laws of a foreign state, which is subject to
8 the provisions of this act, shall be deemed to have
9 irrevocably appointed the Secretary of State as its agent
10 upon whom may be served any summons, subpoena duces tecum or
11 other process directed to such charitable organization,
12 fundraising counsel, professional solicitor, or any partner,
13 principal officer or director of any of them, in any action
14 or proceeding brought under the provisions of this act.
15 Service of such process upon the Secretary of State shall be
16 made by personally delivering to and leaving with him a copy
17 thereof at his office in the city of Harrisburg, Pennsylvania
18 and such service shall be sufficient service; provided notice
19 of such service and a copy of such process shall be forthwith
20 sent by said secretary to such charitable organization,
21 fundraising counsel, professional solicitor, or other person
22 to whom it is directed by registered mail, with return
23 receipt requested at the last address known to said
24 secretary.
25 Section 17. Administrative enforcement and penalties.
26 (a) General rule.--The secretary may refuse to register or
27 revoke or suspend the registration of any charitable
28 organization, professional fundraising counsel or professional
29 solicitor whenever he finds that a charitable organization,
30 professional fundraising counsel or professional solicitor, or
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1 an agent, servant or employee thereof:
2 (1) Has violated or is operating in violation of any of
3 the provisions of this act, the regulations of the
4 department, or an order issued by the secretary.
5 (2) Has refused or failed or any of its principal
6 officers has refused or failed, after notice, to produce any
7 records of such organization or to disclose any information
8 required to be disclosed under this act or the regulations of
9 the department.
10 (3) Has made a material false statement in an
11 application, statement or report required to be filed under
12 this act.
13 (b) Additional actions.--When the secretary finds that the
14 registration of any person may be refused, suspended or revoked
15 under the terms of subsection (a), the secretary may:
16 (1) Revoke a grant of exemption to any of the provisions
17 of this act.
18 (2) Issue an order directing that the person cease and
19 desist specified fundraising activities.
20 (3) Impose an administrative fine not to exceed $1,000
21 for each act or omission which constitutes a violation of
22 this act and an additional penalty, not to exceed $100 for
23 each day during which such violation continues. Registration
24 will be automatically suspended upon final affirmation of an
25 administrative fine until the fine is paid or until the
26 normal expiration date of the registration. No registration
27 shall be renewed until the fine is paid.
28 (4) Place the registrant on probation for such period of
29 time and subject to such conditions as he may decide.
30 (c) Administrative procedures.--All actions of the secretary
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1 shall be taken subject to the right of notice, hearing and
2 adjudication and the right of appeal therefrom in accordance
3 with Title 2 of the Pennsylvania Consolidated Statutes (relating
4 to administrative law and procedure).
5 Section 18. Criminal penalties.
6 (a) Deceit in fraud violation.--Any person who willfully and
7 knowingly violates any provisions of this act with intent to
8 deceive or defraud any charity or individual, commits a
9 misdemeanor of the first degree and shall, upon conviction, be
10 sentenced to pay a fine not exceeding $10,000 or imprisonment
11 for not more than five years, or both.
12 (b) Other violations.--Any other violation of this act shall
13 constitute a misdemeanor of the third degree punishable, upon
14 conviction, by a fine not exceeding $2,500 or imprisonment for
15 not more than one year, or both.
16 (c) Location of offense.--Any offense committed under this
17 act involving a solicitation may be deemed to have been
18 committed at either the place at which the solicitation was
19 initiated, or at the place where the solicitation was received.
20 Section 19. Civil penalties.
21 (a) General rule.--Whenever the Attorney General or any
22 district attorney shall have reason to believe, or shall be
23 advised by the secretary, that the person is operating in
24 violation of the provisions of this act, the Attorney General or
25 district attorney may bring an action in the name of the
26 Commonwealth against such person who has violated this act, to
27 enjoin such person from continuing such violation and for such
28 other relief as the court deems appropriate. In any proceeding
29 under this subsection, the court may make appropriate orders,
30 including:
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1 (1) the appointment of a master or receiver;
2 (2) the sequestration of assets;
3 (3) the reimbursement of persons from whom contributions
4 have been unlawfully solicited;
5 (4) the distribution of contributions in accordance with
6 the charitable purpose expressed in the registration
7 statement or in accordance with the representations made to
8 the person solicited;
9 (5) the reimbursement of the Commonwealth for attorney
10 fees and the costs of investigation, including audit costs;
11 (6) the assessment of a civil penalty not exceeding
12 $1,000 per violation of the act, which penalty shall be in
13 addition to any other relief which may be granted; and
14 (7) the granting of other appropriate relief.
15 (b) Assurance of voluntary compliance.--In any case where
16 the Attorney General or district attorney has authority to
17 institute an action or proceeding under this act, he may accept
18 an assurance of voluntary compliance through which any person
19 alleged to be engaged in any method, act or practice in
20 violation of this act agrees to discontinue such method, act or
21 practice. Such assurance may, among other terms, include a
22 stipulation of a voluntary payment by such person of the cost of
23 the investigation or of an amount to be held in escrow pending
24 the outcome of an action or as restitution to agreed persons, or
25 both. Any such assurance of compliance shall be in writing and
26 shall be filed with a court of the Commonwealth. Matters closed
27 may, at any time be reopened by the court for further
28 proceedings in the public interest. In the event of an alleged
29 violation of the assurance of voluntary compliance, the Attorney
30 General or district attorney may, at his discretion, either
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1 initiate contempt proceedings or proceed as if the assurance of
2 voluntary compliance has not been accepted. Evidence of a
3 violation of such assurance shall be prima facie evidence of a
4 violation of this act in any subsequent proceeding brought by
5 the Attorney General or district attorney.
6 Section 20. Additional regulations by counties, municipalities
7 or consolidated government.
8 Nothing contained in this act shall serve to deny the right
9 to any county, municipality or consolidated government to pass
10 such ordinances, rules and regulations as may be deemed
11 appropriate to regulate further the soliciting of contributions
12 within such county, municipality or consolidated government.
13 Such ordinance may not alter any of the obligations set forth in
14 this act or the regulations of the department but may add
15 thereto other requirements and rules as appear to be proper to
16 the county, municipality or consolidated government involved.
17 Section 21. Charitable organizations deemed fiduciary.
18 Every person soliciting, collecting or expending
19 contributions for charitable purposes and every officer,
20 director, trustee and employee of any such person concerned with
21 the solicitation, collection or expenditure of such contribution
22 shall be deemed to be a fiduciary and acting in a fiduciary
23 capacity.
24 Section 22. Prior registration unaffected.
25 Any person who is registered with the department under the
26 act of April 30, 1986 (P.L.107, No.36), known as the Charitable
27 Organization Reform Act, prior to the effective date of this act
28 shall, on and after the effective date hereof, be deemed to be
29 registered with the department as provided for in this act.
30 Registration shall be reissued in accordance with this act.
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1 Section 23. Repeals.
2 The act of April 30, 1986 (P.L.107, No.36), known as the
3 Charitable Organization Reform Act, is repealed. Existing
4 regulations promulgated pursuant to the Charitable Organization
5 Reform Act, shall remain in effect until amended in accordance
6 with the provisions of this act.
7 Section 24. Appropriation.
8 All fees shall be paid to the State Treasurer and are
9 appropriated to the Department of State for the administration
10 and enforcement of this act and all fines, penalties, attorney
11 fees and costs of investigation shall be paid to the
12 governmental agency that conducted the litigation.
13 Section 25. Effective date.
14 This act shall take effect as follows:
15 (1) Sections 9(j) and 13(c) shall be effective in 120
16 days.
17 (2) The remaining provisions of this act shall take
18 effect in 60 days.
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