For Nonprofit Organizations and Professional Fundraisers
CASES FROM THE SUPREME COURT OF THE UNITED STATES
Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980)
The Supreme Court holds that an ordinance granting solicitation permits only to groups spending at least 75 percent of their receipts on “charitable purposes” (which cannot include fundraising, overhead, or other administrative expenses) is an unconstitutional restriction on free speech.
Secretary of State of Maryland v. Joseph H. Munson Company, Inc., 467 U.S. 947 (1984)
The Supreme Court holds that a statute prohibiting any solicitation activity in which fundraising costs consume 25 percent or more of funds raised is an unconstitutional restriction on free speech.
Riley v. National Federation of the Blind of North Carolina, 487 U.S. 781 (1988)
The Supreme Court holds that a statute requiring solicitors to disclose the percentage of contributions that will be devoted to charitable purposes is an unconstitutional restriction on free speech.
Madigan v. Telemarketing Associates, Inc., 538 U.S. 600 (2003)
The Supreme Court reiterates that a fraud prosecution cannot rest solely on allegations of high fundraising costs or allegations that fee arrangements were not disclosed during solicitations. The Court also holds that a fraud action may be prosecuted if it is premised upon a fundraiser’s misrepresentations.
OTHER CASES OF INTEREST
Public Citizen, Inc. v. Pinellas County, 321 F. Supp.2d 1275 (M.D.Fla. 2004) (a/k/a “Pinellas II”)
A federal District Court rules that, among other things, (a) an ordinance regulating charitable solicitations cannot grant the regulator too much discretion in demanding information from applicants, and that (b) the regulator must grant or deny permits in a timely manner and, if he fails to do so, the permit must be granted.
American Target Advertising, Inc. v. Giani, 199 F.3d 1241 (10th Cir. 2000)
The Tenth Circuit rules that (a) Utah may compel a foreign professional fundraising consultant to register with the state if the PFC suggests lists of potential Utah donors and (b) that PFCs cannot be compelled to post a bond or letter of credit.