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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