Fundraising Counsels for Charitable Purposes
Updated Forms Now Available!
As of February 1, 2020, the newly updated forms are required.
A fundraising counsel is a type of professional fundraiser. A fundraising counsel can be a person, corporation, or unincorporated association who is hired by a charity to plan, manage, advise, counsel, consult, or prepare materials to solicit donations for charitable purposes. Unlike the commercial fundraiser, a fundraising counsel does not solicit donations from the public, and does not receive or exercise any control over the solicited funds or property. Instead, the donations go directly to the charity.
By law, the California Attorney General oversees the activities of fundraising counsel. A fundraising counsel that operates in California must do all of the following:
- Register with the Attorney General's Registry of Charitable Trusts before working with a charity.
- Pay a registration fee of $350.
- Renew registration each year.
- File a Notice of Intent form 10 days before starting any service for a charitable organization.
- Comply with the contract requirements set by California law.
- File a report each year on a form provided by the Registry of Charitable Trusts listing the charities for whom the fundraising counsel provided services and certifying that the fundraising counsel has a written contract with each charity that complies with the legal requirements.
The failure to comply with registration, renewal, and filing requirements, and the prohibitions and other requirements set out in Government Code section 12599.1 and 12599.6, may lead to the filing of civil litigation or administrative enforcement actions and subject the fundraising counsel to civil penalties and other orders as provided in Government Code sections 12591.1, 12598, subdivisions (a) and (e)(1), and 12599.1, subdivisions (g) and (h).
- 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 providing any fundraising counsel services to any charity: before managing, advising, counseling, consulting, or preparing materials to solicit donations for charitable purposes.
Registration must be renewed by January 15 of each calendar year in which the fundraising counsel does business, and is effective for one year.
Yes. Government Code section 12586.1 states that in addition to a registration fee, a fundraising counsel may be assessed a twenty-five dollars ($25) late fee for each month or part of the month after the date on which the registration or required reports were due if the fundraising counsel does any of the following:
- Exists and operates in California without being registered.
- Solicits contributions in California without being registered or, if applicable, bonded.
- 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 is being conducted.
- The obligations of the fundraising counsel and charitable organization under the contract.
- A statement that the fundraising counsel will not solicit funds or property for charitable purposes or hire anyone else to do so.
- A statement that the fundraising counsel will not receive or control funds or property solicited for charitable purposes or hire anyone else to do so.
- A statement that the charitable organization exercises control and approves the content and frequency of solicitation.
- A clear statement of the fees and any other forms of compensation that will be paid to the fundraising counsel.
- The effective and termination date of the contract, and the date the solicitation will start.
- Provisions stating the charitable organization’s right to cancel the contract without liability for 10 days following the date the contract is executed; and the charity’s right to cancel the contract after the initial period by giving a 30-day notice and paying fundraising counsel for services provided by the fundraising counsel up to the effective date of the notice.
For more detailed information about the mandatory contractual requirements, see Government Code section 12599.1, subdivision (f).
If there are common directors, officers and employees between the fundraising counsel and the charitable organization for which services are being provided a copy of the contract will need to be filed. Otherwise, there is no requirement that a copy of the contract be submitted unless specifically requested by the Attorney General's Office.
Fundraising counsels 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 solicit aid for victims of emergency hardship or disasters, the notice must be filed not later than at the start of solicitation.
CT-11CF, pdf :
Notice Of Intent To Solicit For Charitable Purposes - Fundraising Counsel
[See Government Code, section 12599.1, subdivision (e)]
Fundraising counsel are prohibited from directly or indirectly controlling funds, assets, or property received as a result of the solicitation. This means that fundraising counsel cannot approve or veto the payment of expenses from any account to which funds received from a solicitation were deposited. A fundraising counsel cannot maintain an interest over a bank account or have any access over funds held by a caging company on behalf of the charitable organization. If the fundraising counsel has direct or indirect control over the funds or assets solicited, it will be considered a commercial fundraiser and additional registration and reporting requirements will apply. See Government Code section 12599.1, subdivision (a).
No, the employees of a charitable organization are not included in the definition of a fundraising counsel. See Government Code section 12599.1, subdivision (b)(3).
If the fundraising counsel make less than $25,000 in total annual gross compensation for acting as a fundraising counsel, it will not fall under the definition of a fundraising counsel for charitable purposes. See Government Code section 12599.1, subdivision (b)(6).
If your company only provides graphic services and does not consult on the content of the solicitation materials, then you may not need to register as a fundraising counsel. Likewise, if your company only provides printing services without consulting on the content of the solicitation materials, then you may not need to register as a fundraising counsel.