Charitable Fundraising Platforms (including Crowdfunding)

On January 1, 2023, certain sections of California’s Charitable Fundraising Platforms law (Gov. Code, § 12599.9) become operative.  The Attorney General is in the process of promulgating regulations to fully implement this law.

Key provisions that take effect starting January 1, 2023 are:

• Charitable Fundraising Platforms and Platform Charities should ensure compliance with the law’s good standing requirements for charities.  (Gov. Code, § 12599.9, subds. (a)(3) and (d).)  The Attorney General’s Registry of Charitable Trusts maintains a list of charities that may not operate or solicit in California. For information on using this list, see Section 316 in the latest proposed regulations. Also see lists from the Internal Revenue Service and the Franchise Tax Board.
• Donations cannot be diverted or misused, and shall be maintained in a separate account from other funds belonging to a Charitable Fundraising Platform or Platform Charity.  (Gov. Code, § 12599.9, subd. (h).)

• Charitable Fundraising Platforms and Platform Charities are required to make disclosures that prevent the likelihood of donor deception or confusion, when applicable. (Gov. Code, § 12599.9, subds. (e) and (f)(2)(B).)  For information on the proposed regulations on this, see Section 314, subdivision (a), in the latest proposed regulations.
• Solicitations for “non-consenting” charities must comply with Government Code section 12599.9, subdivision (f)(2).

The registration and other requirements in Government Code section 12599.9 are being delayed to January 2024 given the pending nature of the proposed regulations. Proposed regulations do not carry the force of law.