California State Senate Advances AG-Sponsored Bill to Provide Oversight and Protection of Online Charitable Donations

OAKLAND – The California State Senate today approved Assembly Bill 488 (AB 488), a bill authored by Assemblymember Jacqui Irwin and sponsored by Attorney General Rob Bonta. AB 488 will ensure critical oversight by the California Department of Justice over charitable fundraising that occurs on internet platforms. Over the years, charitable giving through internet platforms has increased exponentially, requiring an update to California’s charitable giving laws. AB 488 will protect both donors and charities from deceptive or misleading solicitations by creating a framework that specifically defines online platform entities and requires them to register and report to the Attorney General’s Registry of Charitable Trusts.

“On top of a national pandemic, our state has been greatly impacted by this year’s wave of devastating wildfires. As Californians rise up to the occasion to help those in need, many will choose to make charitable donations through internet platforms,” said Attorney General Bonta. “To ensure my office’s continued ability to protect the public, we need to be in a stronger position to oversee online charitable fundraising practices. AB 488 will grant my office the ability to properly supervise third-party internet platforms and ensure that donations made online go towards their intended purposes, which is especially important during this difficult time.”

“I am pleased the State Senate voted overwhelmingly to approve AB 488,” said Assemblymember Jacqui Irwin. “After years of discussions and development with stakeholders, California is one step closer to securing the important oversight of the Attorney General that can provide every donor with the confidence that their donations are reaching charities and having an impact in their communities. In recent years donation trends have shifted, with hundreds of millions of dollars flowing through these online charitable fundraising platforms every year. With this new paradigm California must update its laws to provide the same level of oversight as traditional methods of fundraising.”

The California Department of Justice is responsible for regulatory supervision of charities, trustees, commercial fundraisers, and other legal entities that hold or solicit donations for charitable purposes. In recent years, charitable fundraising on internet platforms has grown exponentially, altering the landscape of charitable giving beyond what current law contemplated. Internet companies have developed methods for individuals to donate to charities through websites and phone applications that serve as “charitable fundraising platforms.” As currently written, California’s solicitation laws do not specifically reach these online platforms, resulting in instances of deceit and mistreatment of charitable donations that the Attorney General’s Office is not able to address through enforcement of existing charity oversight laws.

If signed into law, AB 488 will:

• Create a level playing field for all charitable giving platforms, regardless of business model, by defining two new groups of entities, “charitable fundraising platforms” and “platform charities” that are subject to the Attorney General’s supervision;

• Require covered entities to provide meaningful and transparent disclosures on their internet platforms, promptly distribute donations, and prohibit solicitations for charities not in good standing with the Attorney General’s Registry of Charitable Trusts; 

• Permit some instances of soliciting for a charity without prior consent if certain criteria that safeguard against harm to charities and the public are met; and

• Authorize the Attorney General’s Office to implement regulations to require donor notification and reporting requirements, and to encourage transparency and accountability.

The text of AB 488 is available here.