Kamp, 020283 CAAGO, AGO 81-1110

Docket Nº:AGO 81-1110
Case Date:February 02, 1983
Court:California
 
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JOHN K. VAN DE KAMP Attorney General
VICTOR D. SONENBERG Deputy Attorney General
AGO 81-1110
No. 81-1110
California Attorney General Opinion
Office of the Attorney General State of California
February 2, 1983
         THE HONORABLE JERRY R. HERMAN, DISTRICT ATTORNEY, MARIN COUNTY, has requested an opinion on the following question:          In those situations where a professional soliciting firm raises funds for a peace officers' union by selling tickets to a variety show under an arrangement in which the firm retains 80% of the funds raised and the union receives the remaining 20%, is there a violation of Business and Professions Code sections 17510 et seq. (charitable solicitation disclosures) or section 17500 (false advertising) when the solicitor exhibits to the prospective buyers a "Solicitation or Sale for Charitable Purposes Card" which gives the name and address of the union as recipient and which states that 20% of the proceeds "goes directly to charity" if in fact the union uses a portion of that 20% for union promotion, advertising and lobbying?          CONCLUSION          In those situations where a professional soliciting firm raises funds for a peace officers' union by selling tickets to a variety show under an arrangement in which the firm retains 80% of the funds raised and the union receives the remaining 20%, there is not a violation of Business and Professions Code section 17510 et seq. (charitable solicitation disclosures), but there is a violation of Business and Professions Code section 17500 (false advertising) when the solicitor exhibits to the prospective buyers a "Solicitation or Sale for Charitable Purposes Card" which gives the name and address of the union as recipient and which states that 20% of the proceeds "goes directly to charity" if in fact the union uses a portion of that 20% for union promotion, advertising and lobbying and the solicitor is, or should be, aware of the union's intent to so use the proceeds.          ANALYSIS          The present question requires an interpretation of section 17500 of the Business and Professions Code,1 which is the general statute prohibiting false or misleading advertising,2 and sections 17510 to 17510.7 which is the statute requiring truthful disclosures to contributors in connection with charitable solicitations. The question is whether certain solicitations on behalf of a peace officers' union violated either of these statutes.3          The facts presented to us in connection with this question indicate that a peace officers' union had engaged the services of a professional promoter to solicit funds on behalf of the union by means of selling tickets to a variety show. The arrangement between the union and the promoter provided that 80% of the proceeds were to go to the promoter for direct fundraising expenses while the union was to retain 20% of such proceeds. In the course of the solicitations the promoter identified the name and address of the union on whose behalf he was soliciting and represented to the contributors that the 20% of the funds remaining after fundraising expenses "goes directly to charity." In fact the union intends to use a portion of its 20% share for union promotional purposes, such as public relations, advertising and lobbying activities. For purposes of this opinion we assume that the promoter was aware of the union's intent with respect to the use of its share of the solicited funds.          I          APPLICABILITY OF SECTIONS 17510 - 17510.7          With respect to the legality of such solicitations we examine first the charitable solicitation disclosure statute. (§§ 17510-17510.7.)          The statute applies to a type of conduct which it denominates as a "solicitation for charitable purposes" (§ 17510.2(a)) or a "sales solicitation for charitable purposes" (§ 17510.2(b)). A "solicitation for charitable purposes" is defined as:          "[A]ny request, plea, entreaty, demand, or invitation, or attempt thereof, to give money or property, in connection with which:
"(1) Any appeal is made for charitable purposes; or "(2) The name of any charity, philanthropic or charitable organization is used or referred to in any such appeal as an inducement for making any such gift; or "(3) Any statement is made to the effect that such gift or any part thereof will go to or be used for any charitable purpose or organization." (§ 17510.2(a).)
The term "sales solicitation for charitable purposes" is defined in the same manner except that it refers to a solicitation by means of a sale or offer to sell goods or services as opposed to a direct appeal for funds. (§ 17510.2(b).) (We shall refer to both types of solicitations as "charitable solicitations.") Thus there is a charitable solicitation when, among other things, one appeals for money or attempts to sell something and, in connection with this appeal or attempt, the name of a charity is referred to as an inducement for the contribution. (§ 17510.2 subds. (a)(2), (b)(2).) We note that the statute defines the term "charity" to include:
"[A]ny nonprofit community organization, fraternal, benevolent, educational, philanthropic, or service organization, governmental employee organization, any person who solicits or obtains contributions solicited from the public for charitable purposes, and any person who holds any assets for charitable purposes." (Emphasis added; § 17510.2(d).)
         Since a union of peace officers constitutes a "governmental employee organization," and is thus a "charity" within the meaning of the statute, an appeal that indicated that funds were being collected on behalf of the peace officers' union would be a charitable solicitation.          It is this conduct, constituting a charitable solicitation, that actuates the operative provisions of the statute, i.e., those provisions requiring the solicitor to make certain disclosures to the prospective donor.4 Such disclosure requirements are set forth in section 17510.3(a) which directs a solicitor to present a prospective contributor a "solicitation or sale for charitable purposes card" prior to any solicitation, or printed material during the course of the solicitation. The section requires that such card or printed material must include the following information:
"(1) The name and address of the combined campaign, each organization, or fund on behalf of which all or any part of the money collected will be utilized for charitable purposes; "(2) If there is no organization or fund, the manner in which the money collected will be utilized for charitable purposes; "(3) The amount, stated as a percentage of the total gift or purchase price, that will be used for direct fundraising expenses. If paid fund-raisers are paid a set fee rather than a percentage of the total amount raised, the card shall show the total cost that is estimated will be used for direct fundraising expenses. If the solicitation is not a sale solicitation, the card may state, in place of the amount of fundraising expenses, that an audited financial statement of such expenses may
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