On July 6th, New York State Attorney General Letitia James followed California State Attorney General Xavier Becerra (who took similar actions in 2018 and 2019) in calling on the Black Lives Matter Foundation (which, it is important to note, has no formal affiliation with the Black Lives Matter Movement) to cease fundraising activities until it is properly registered with the New York State Charities Bureau.
I have been representing charities for twenty years, and there are few applicable compliance regimes that give charities more administrative stress than state charitable solicitation laws and compliance. While these rules can be burdensome, especially for charities operating on a national level, they are important for the protection of donors and the charities themselves, as well as for businesses (and their consumers) who collaborate with or promote charities. As can be seen from these recent actions, these rules also are enforced regularly.
In most states, charitable organizations are required to be registered -- with the Attorney General or another consumer protection agency -- before soliciting charitable contributions in those states. This is very much a consumer protection measure so that members of the public can be assured that their charitable contributions are being made to a legitimate, tax-exempt charitable organization. In this case, I would argue that it is also a protective measure for genuine charities who do not want their name abused by, or confused with, an organization that may not be in compliance with all applicable laws. Similarly, many states, including New York and California, also require charities to make certain written or oral disclosures in connection with charitable solicitations so that donors can easily research the legitimacy of the charity, its mission and its level of compliance.
AG James' notice was accompanied by a list of advice for potential donors aimed at encouraging them to be careful with their charitable dollars and to research charities before making donations. This is not at all new advice from the AG or her Charities Bureau (or any other charity watchdog agency) but it does also include some timely advice under our current circumstances - beware of organizations formed hastily in the wake of a particular tragedy. That is not actually the case for the Black Lives Matter Foundation -- it was formed years ago -- but, as noted in the New York AG's statement, the Foundation came under heightened scrutiny in the wake of recent increases in giving to the Foundation in support of the BLM Movement.
Regardless of the reason for this particular set of actions, it is a reminder to all charitable organizations -- and anyone promoting them -- that proper registration is required and will be enforced. As stated earlier, this is a consumer protection measure, similar to any other in the advertising world, designed to keep the general public from being duped.
Originally published July 9, 2020.
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