Commercial Fundraisers for Charitable Purposes
Updated Forms Now Available!
As of February 1, 2020, the newly updated forms are required.
A commercial fundraiser is a type of professional fundraiser. A commercial fundraiser can be a person, corporation, or unincorporated association who is paid by a charity to solicit money or property on the charity's behalf. The commercial fundraiser may solicit donations through various means, such as: direct mail, telephone, email or internet platform, auction at charity events, event ticket sales, vehicle donation, or thrift store operation. Commercial fundraisers may be paid either a flat fee or a percentage of the donations collected in the charity's name.
By law, the California Attorney General oversees the activities of commercial fundraisers. A commercial fundraiser that operates in California must do all of the following:
- Register with the Attorney General's Registry of Charitable Trusts before soliciting.
- Pay a $350 registration fee.
- Post bond, or submit cash deposit, in the amount of $25,000, at the time registration application is submitted.
- Renew registration each year.
- File a Notice of Intent to Solicit Form 10 days before the solicitation campaign starts.
- File annual financial reports. They must be filed by January 30th of each year.
- Solicit only for charitable organizations that are registered or exempt from registration with the Attorney General' s Registry of Charitable Trusts, per Government Code section 12599, subdivision (m). To verify if a charitable organization is registered or exempt, use the Registry's Verification Search tool.
- Comply with contract requirements set by California law.
Charitable organizations and commercial fundraisers are subject to specific legal obligations, and are prohibited from engaging in certain practices as set forth in statutes. (Government Code, sections 12599 and 12599.6.) Some of the more notable requirements are as follows:
- There must be no misrepresentation about the purpose of a charitable organization, or the nature or purpose of the beneficiary of a solicitation.
- There must be established procedures and control over the fundraising activities.
- The fundraising cannot use coercive tactics.
- There must be a written contract that complies with all of the requirements of Government Code section 12599.6, subdivision (i).
- Charitable organizations cannot hire a commercial fundraiser who is not registered with the Attorney General's Registry of Charitable Trusts.
- Commercial fundraisers cannot raise funds for any charitable organization that are required to be registered with the Attorney General's Registry of Charitable Trusts unless the charitable organization is so registered or, if not, agrees to register before the start of a solicitation.
- Commercial fundraisers must, within five working days, either deposit in a bank account solely controlled by the charitable organization or deliver personally to the charitable organization all contributions received on behalf of the charitable organization.
The failure to comply with registration, renewal and filing requirements, and the prohibitions and other requirements set out in Government Code sections 12599 and 12599.6, may lead to the filing of civil litigation or administrative enforcement action and subject the commercial fundraiser to civil penalties and other orders as provided in Government Code sections 12591.1, 12598, subdivision (e)(1), and 12599, subdivision (f). Please review California Law on Supervision of Trustees and Fundraisers for Charitable Purposes.
- CT-1CF Form & Instructions - Annual Registration Form
- CT-2CF Form & Instructions - Annual Financial Report
- CT-2TCF Form & Instructions - Annual Financial Report - Thrift Stores
- CT-2VCF Form & Instructions - Annual Financial Report - Vehicle Donations
- CT-4CF Form & Instructions - Surety Bond Form
- CT-8CF Form & Instructions - Deposit by Assignment in Lieu of Surety Bond
- CT-9CF Form & Instructions - Notice of Assessment in Lieu of Surety Bond
- CT-10CF Form - Notice of Intent for Charitable Purposes
- California Law on Supervision of Trustees and Fundraisers for Charitable Purposes - Government Code sections 12580-12599.8
- California Regulations on the Supervision of Trustees and Fundraisers for Charitable Purposes - Title 11, Division 1, Chapter 4, sections 300-316
- California Regulations on Administrative Enforcement of the Supervision of Trustees and Fundraisers for Charitable Purposes Act- Title 11, Division 1, Chapter 15, sections 999.6- 999.9.5
Registration is required before soliciting any funds in California for charitable purposes, or before January 15th of each year.
Yes. A commercial fundraiser must file an annual financial report for each campaign conducted for each charity during a calendar year. The report must be signed both by the commercial fundraiser and charity officials.
There are three different financial reporting forms for commercial fundraisers. Use the form that is appropriate for the type of solicitation you conducted:
Annual financial reports must be filed by January 30th of each year.
Under Government Code section 12586.1, in addition to a registration fee, a commercial fundraiser may be assessed a late fee of twenty-five dollars ($25) for each month or part of the month after the date on which the registration statement or financial report were due to be filed if:
- The commercial fundraiser exists and operates in California without being registered.
- The commercial fundraiser solicits contributions in California without being registered or, if applicable, bonded.
- The commercial fundraiser fails to correct the deficiencies in its registration or annual report within 30 days of receipt of written notice of those deficiencies.
The Attorney General has the option of imposing penalties instead of late fees under Government Code section 12591.1.
The written contract must contain or state:
- The legal name and address of the organizations as registered with the Registry of Charitable Trusts, unless the charitable organization is exempt from registration.
- The charitable purpose for which the solicitation campaign or event is being conducted.
- The obligations of both the commercial fundraiser and charitable organization.
- If the commercial fundraiser will be paid a fixed fee, the amount of the fee and a good faith estimate of what percentage of the total contributions the fee will comprise. The contract must clearly set forth the assumptions on which the good faith estimate is based.
- If the commercial fundraiser will be paid a percentage fee, the percentage of total contributions that will be given to the charitable organization. If the solicitation involves the sale of goods or services, or sale of admission to an event, the contract must state the percentage of the purchase price the charitable organization will retain. The percentage must be calculated by subtracting from total contributions and sales receipts not only the commercial fundraiser's fee, but also any additional fundraising costs the charitable organization must pay.
- The effective and termination dates of the contract, and the date the solicitation will start.
- A provision that states that all contributions received by the commercial fundraiser will, within five working days of receipt, either be deposited in a bank account solely controlled by the charitable organization or delivered in person to the charitable organization.
- A statement that the charitable organization will exercise control and approve the content and frequency of any solicitation.
- The maximum amount the commercial fundraiser plans to pay individuals or entities to secure any person’s attendance at, or approval, sponsorship or endorsement of, a fundraising event.
- Provisions specifying that the charitable organization has a right to cancel the contract without any liability or expense, 10 days after the date the contract is executed. After the initial 10-day cancellation period, the organization may cancel the contract with 30-days notice and payment for services provided by the commercial fundraiser for up to 30 days after the notice is served.
- Provisions specifying that after the initial 10-day period, the charitable organization has a right to cancel the contract for any reason without liability if the commercial fundraiser or its agents make material misrepresentations, harm the charitable organization’s reputation, or are found to have been convicted of a crime arising from charitable solicitations.
- The contract must be signed by the commercial fundraiser’s authorized contracting officer and an official of the charitable organization who is authorized to sign the contract by the governing board of directors.
For more detailed information about the mandatory contract requirements, see Government Code sections 12599, subdivision (i) and 12599.3.
No, a copy of the contract does not need to be submitted unless specifically requested by the Attorney General's Office.
Yes. Charitable organizations have the right to cancel a contract if any of the following applies:
- The commercial fundraiser is not registered with the Attorney General’s Registry of Charitable Trusts.
- Within 10 days of the execution (signing) of the contract. Charitable organizations in California have the right to cancel the contract without cost, penalty or liability for a period of 10 days following the date the contract is executed. A duplicate of the notice of cancellation should be sent to the Attorney General’s Registry of Charitable Trusts.
- After the initial 10-day cancellation period, charitable organizations may cancel their contracts with commercial fundraisers provided they give a 30-day notice. This cancellation may be for any reason and the statutory right to cancel overrides any contradictory language in the contract, but the charitable organization may be responsible for services provided by the commercial fundraiser up to 30 days after the notice is served.
- After the initial 10-day period, a charitable organization has the right to cancel a contract with a commercial fundraiser without liability if the commercial fundraiser or its agent: makes material misrepresentations during a solicitation, harms the charitable organization’s reputation during a solicitation, or is found to have been convicted of a crime arising from fundraising activities.
[See Government Code sections 12599.3]
Under Government Code section 12599, commercial fundraisers for charitable purposes are required to file a notice of intent to solicit for charitable purposes, not less than 10 working days before the start of each solicitation campaign, event or service. For campaigns to aid victims of emergency hardship or disasters, the notice must be filed not later than at the start of solicitation.
Notice Of Intent To Solicit For Charitable Purposes - Commercial Fundraiser
[See Government Code section 12599, subdivision (h)]
No, it can only solicit on behalf of a charitable organization that is registered or exempt from registration with the Attorney General's Registry of Charitable Trusts. To verify if the charitable organization is registered or exempt, please use the Registry's Verification Search tool.
The following acts are prohibited:
- Operating in violation of the Supervision of Trustees and Fundraisers for Charitable Purposes Act [Govt. Code sec. 12580 et seq.], regulations and orders issued by the Attorney General.
- Committing unfair or deceptive acts, or engaging in fraudulent conduct.
- Using any name, symbol, emblem or other information that falsely suggests or implies a contribution is for a particular charitable organization.
- Falsely telling donors that a contribution is for a charitable organization or will be used for a charitable purpose.
- Telling donors that a person sponsors, endorses or approves a charitable solicitation when that person has not agreed in writing to have their name used for such a purpose.
- Misrepresenting that goods or services have endorsements, sponsorships, approvals, characteristics or qualities they do not have.
- Misrepresenting that a person has endorsements, approvals, sponsorships, status or affiliations they do not have.
- Misrepresenting that registration with the Attorney General’s Registry of Charitable Trusts constitutes an endorsement or approval by the Attorney General.
- Representing that a charitable organization will receive an amount greater than the reasonably estimated net proceeds from a solicitation campaign or event.
- Issuing cards, stickers, emblems, plates or other items that can be used for display on a motor vehicle, and which suggest an affiliation with, or endorsement by, public safety personnel or a group of public safety personnel.
- Representing that any portion of contributions solicited by a charitable organization will be given to another charitable organization unless the second charitable organization provides prior written consent for such use of its name.
- Representing that tickets to events will be donated for use by another person or entity unless: the charitable organization or commercial fundraiser has obtained written commitments from charitable organizations that they will accept a specific number of donated tickets; and the donated tickets, when combined with other ticket donations, do exceed either the ticket donations received from charitable organizations or the total capacity of the event site.
[See Government Code sections 12599, 12599.6]
Commercial fundraisers must keep records for at least 10 years following each solicitation campaign, and the records must contain:
- The date and amount of each cash contribution.
- The date, amount, name and address of each non-cash contributor.
- The name and address of each employee or agent involved.
- Documentation of all revenue received and expenses incurred.
- For each account into which the fundraiser deposited revenue, the account number and name and location of the bank or other financial institution in which the account was maintained.
[See Government Code sections 12599.7]