Bill S3797-2013

Relates to solicitation used by or on behalf of any charitable organization; requires a statement setting forth percentage of administrative expenses

Relates to solicitation used by or on behalf of any charitable organization; requires a statement setting forth the percentage of funds raised by the professional fund raiser or professional solicitor that was forwarded to the charitable organizations on behalf of which it solicited during the past two fiscal years; requires a statement setting forth the percentage of such charitable organization's funds allocated to administrative expenses during the past two fiscal years of the organization; determines fines.

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Actions

  • Jan 8, 2014: REFERRED TO FINANCE
  • Jun 21, 2013: RECOMMITTED TO RULES
  • Jun 11, 2013: ORDERED TO THIRD READING CAL.1261
  • Jun 11, 2013: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Feb 15, 2013: REFERRED TO FINANCE

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Memo

BILL NUMBER:S3797

TITLE OF BILL: An act to amend the executive law, in relation to solicitation used by or on behalf of any charitable organization

SUMMARY OF PROVISIONS:

SECTION 1 amends subdivisions 2 and 3 of section 174-b of the Executive Law to provide:

(1)that any solicitation by or on behalf of any charitable organization shall include a statement setting forth the percentage of such charitable organizations funds allocated to administrative expenses during the past two fiscal years. Administrative expenses are defined for the purposes of this subdivision as any direct contribution that does not go directly to the public or individual persons a charitable organization serves or assists.

(2) That any solicitation made by a professional fundraiser or professional solicitor by any means on behalf of a charitable organization required to be registered pursuant to Article 7-A of the Executive Law shall include a statement of the percentage of funds raised by the professional fundraiser of professional solicitor that was forwarded to the charitable organizations on behalf it solicited during the past two fiscal years.

(3) That the Attorney General may prosecute an action for violation of these subdivision and provides for fines.

SECTION 2 provides that this act shall take effect on the ninetieth day after it shall have become law and shall apply for all solicitation used by or on behalf of any charitable organization on or after such effective date.

PURPOSE AND JUSTIFICATION: New Yorkers collectively receive millions of solicitations for donations to charities each year. Although the State, through one of its websites, provides information as to how much of each donated dollar is actually used to directly benefit the needy, this is not useful when a person is being solicited over the phone and an immediate response is being requested, or for those who do not have access to the internet. There have been articles written over the years discussing how little some professional fundraisers actually give to the charities for whom they solicit, and Attorney General Schneiderman recently issued a report that shows that some charities and professional fundraisers use virtually all the funds they raise for their own overhead and benefit.

This bill would require that fundraisers disclose in their solicitation, whether in writing, by electronic mail or by phone, the percentage of funds that they have actually passed on to the objects of their charity over the past two years. With this information, New Yorkers can make a better informed decision as to whether they should donate in response to the solicitation they are receiving.

EXISTING LAW: Article 7-A of the Executive Law regulates the charitable solicitation in the State.

PRIOR LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall become Law and shall apply for all solicitation used by or on behalf of any charitable organization on or after such effective date.


Text

STATE OF NEW YORK ________________________________________________________________________ 3797 2013-2014 Regular Sessions IN SENATE February 15, 2013 ___________
Introduced by Sens. RANZENHOFER, DeFRANCISCO, MARTINS -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the executive law, in relation to solicitation used by or on behalf of any charitable organization THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivisions 2 and 3 of section 174-b of the executive law, subdivision 2 as amended by chapter 490 of the laws of 2010, subdivision 3 as amended by chapter 43 of the laws of 2002, are amended and a new subdivision 6 is added to read as follows: 2. Any solicitation used by or on behalf of any charitable organiza- tion shall [provide] INCLUDE: (A) a clear description of the programs and activities for which it has requested and has expended or will expend contributions or shall include therein a statement that, upon request, a person may obtain from the organization such a description; AND (B) A STATEMENT SETTING FORTH THE PERCENTAGE OF SUCH CHARITABLE ORGAN- IZATION'S FUNDS ALLOCATED TO ADMINISTRATIVE EXPENSES DURING THE PAST TWO FISCAL YEARS OF THE ORGANIZATION. FOR PURPOSES OF THIS SUBDIVISION, "ADMINISTRATIVE EXPENSE" SHALL MEAN ANY DIRECT CONTRIBUTION OR PORTION THEREOF THAT DOES NOT GO DIRECTLY TO THE PUBLIC OR INDIVIDUAL PERSONS A CHARITABLE ORGANIZATION SERVES OR ASSISTS. If the solicitation is by an institution subject to article five-A of the not-for-profit corporation law, and is for an endowment fund, the solicitation must include a statement that, unless otherwise restricted by the gift instrument pursuant to paragraph (b) of section five hundred fifty-three of the not-for-profit corporation law, the institution may expend so much of an endowment fund as it deems prudent after consider- ing the factors set forth in paragraph (a) of section five hundred fifty-three of the not-for-profit corporation law.
3. In addition to any other disclosure required by law, any solicita- tion by any means by a professional fund raiser or professional solici- tor on behalf of a charitable organization required to be registered pursuant to this article shall clearly and unambiguously disclose: (a) the name of the professional fund raiser as on file with the attorney general and that the solicitation is being conducted by a professional fund raiser; (b) the name of the individual professional solicitor as on file with the attorney general and that the individual is receiving compensation for conducting the solicitation; AND (C) A STATEMENT SETTING FORTH THE PERCENTAGE OF FUNDS RAISED BY THE PROFESSIONAL FUND RAISER OR PROFESSIONAL SOLICITOR THAT WAS FORWARDED TO THE CHARITABLE ORGANIZATIONS ON BEHALF OF WHICH IT SOLICITED DURING THE PAST TWO FISCAL YEARS. 6. AN ACTION FOR A VIOLATION OF SUBDIVISION TWO OR THREE OF THIS SECTION MAY BE PROSECUTED BY THE ATTORNEY GENERAL, OR HIS OR HER DEPUTY, IN THE NAME OF THE PEOPLE OF THE STATE, AND IN ANY SUCH ACTION, THE ATTORNEY GENERAL OR HIS OR HER DEPUTY, SHALL EXERCISE ALL THE POWERS AND PERFORM ALL DUTIES WHICH THE DISTRICT ATTORNEY WOULD OTHERWISE BE AUTHORIZED TO EXERCISE OR TO PERFORM THEREIN PURSUANT TO SECTION ONE HUNDRED SEVENTY-FIVE OF THIS ARTICLE. ANY CHARITABLE ORGANIZATION, PROFESSIONAL FUND RAISER OR PROFESSIONAL SOLICITOR FOUND TO BE IN VIOLATION OF SUBDIVISION TWO OR THREE OF THIS SECTION SHALL BE FINED ONE THOUSAND DOLLARS FOR THE FIRST VIOLATION AND SUCH ORGANIZATION'S REGIS- TRATION PURSUANT TO SECTION ONE HUNDRED SEVENTY-TWO, ONE HUNDRED SEVEN- TY-THREE OR ONE HUNDRED SEVENTY-THREE-B OF THIS ARTICLE, MAY BE REVOKED. ANY CHARITABLE ORGANIZATION, PROFESSIONAL FUND RAISER OR PROFESSIONAL SOLICITOR FOUND TO HAVE BEEN IN VIOLATION OF SUBDIVISION TWO OR THREE OF THIS SECTION IN THREE OR MORE SEPARATE OCCURRENCES, SHALL BE FINED TEN THOUSAND DOLLARS AND SUCH ORGANIZATION'S REGISTRATION PURSUANT TO SECTION ONE HUNDRED SEVENTY-TWO, ONE HUNDRED SEVENTY-THREE OR ONE HUNDRED SEVENTY-THREE-B OF THIS ARTICLE SHALL BE REVOKED. THE CONSUMER PROTECTION DIVISION SHALL, WHENEVER POSSIBLE, ASSIST THE ATTORNEY GENER- AL IN ANY INVESTIGATION OF A CHARITABLE ORGANIZATION PURSUANT TO THIS SUBDIVISION. S 2. This act shall take effect on the ninetieth day after it shall have become law and shall apply to all solicitation used by or on behalf of any charitable organization on and after such effective date.

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