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Newsletters
Police Fund Raising Events Under New Rules
Recent publicity regarding public solicitation abuses on behalf of police, sheriff and firefighters associations has prompted
California's Attorney General's Office to review the accountability of these types of public safety organizations which raise funds through phone and door-to-door solicitation.
New legislation effective January 1, 1999, has been interpreted by the Attorney
General's Office such that public safety organizations are now required to register with the Attorney General as Atrustees of charitable
funds under Government Code section 12581.2. This means that both the commercial fundraiser running the solicitation operation and the public safety association must register with the Attorney
General's Office annually. In addition, an annual financial report is required for all fundraising events involving solicitation on behalf of public safety organizations. Apparently, it is no longer permissible to let the commercial fundraiser with whom a public safety association has contracted to handle business and distribute proceeds without the
association's direct and continued involvement.
Quoting from a recent opinion letter by Bill Lockyer's office:
Typically, a membership organization or labor union funds its activities from its own
members' dues. The general public is not likely to make a non-tax-deductible donation to the
pipe fitters' union or to the government lawyers' union, as deserving as they may be. On the other hand, many police, sheriff and firefighter associations not only collect dues, but also raise money from the general public. There is evidently some tradition in this. Public safety personnel put themselves on the line everyday, and people appreciate it. In the
old days' when the cop on the beat knocked on your door selling tickets to the
policeman's ball, you bought one out of respect for the uniform and the job he did; it was for a good cause. But you knew what the cause was--the cops
themselves.
The tradition of public safety organizations asking for donations continues, but the method of solicitation is different. Rather than the cop on the beat, police organizations hire a commercial fundraiser to put on a circus, sell advertising in a booklet about drug abuse, or stage a performance.
The traditional method of soliciting funds on behalf of police unions is by telephone using what is known as a
telephone boiler room. There, persons who generally do not care about the police organization and who are on the
fundraiser's payroll use their best telemarketing skills to convince someone to spend money. Most of that money does not go to the police union and instead to the
fundraiser's operating expenses and profit. Recent published reports of the solicitation of practices of C.O.P.S. organization and the increasing number of complaints by citizens of phone solicitors claiming to be friends of police officers using high pressure tactics to collect money caused the change in the law and the Attorney General to act.
Required now is full disclosure by the commercial fundraiser to your association before you sign the contract. Once a contract is signed, your association and the fundraiser will operate hand-in-hand to the extent that you must become intimately aware of its complete financial operation and the manner in which it does solicitation. The Annual Financial Report (AG Form CF-2) requires that you and the commercial fundraiser agree for each completed fundraising activity the amount of revenue, the expenses involved (broken down by narrow categories) and various other details. You must also assure yourself that the commercial fundraiser has registered with the Attorney
General's Office and is keeping track of its funds. It is no longer acceptable for the fundraiser to assure you that everything is fine and to simply cut your association a check after the concert or fundraiser is over.
Our office has received inquiries from several associations concerning letters they have received from the Attorney
General's Office directing them to file the appropriate reports so as to comply with the new law. Some of these organizations do not have a telephone number to contact the solicitor directly and
aren't sure of the solicitor's address. This kind of practice, although profitable and worry free in the past, is no longer acceptable under the law.
Please feel free to contact Mike Lackie of Lackie, Dammeier & McGill APC for help with the reporting forms and other requirements of the new law.
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