|
COLORADO CHARITABLE SOLICITATIONS ACT
6-16-101. Short title. This article shall be known and may be cited as the "Colorado Charitable Solicitations Act".
6-16-102. Legislative declaration. The general assembly hereby finds that fraudulent charitable solicitations are a widespread practice in this state which results in millions of dollars of losses to contributors and legitimate charities each year. Legitimate charities are harmed by such fraud because the money available for contributions continually is being siphoned off by fraudulent charities, and the goodwill and confidence of contributors continually is being undermined by the practices of unscrupulous solicitors. The general assembly therefore finds that the provisions of this article, including those involving disclosures to be made by paid solicitors, are necessary to protect the public's interest in making informed choices as to which charitable causes should be supported.
6-16-103. Definitions. As used in this article, unless the context otherwise requires:
(1) "Charitable organization" means any person who is or holds himself out to be established for any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public health, environmental conservation, civic, or other eleemosynary purpose, any person who operates for the benefit of the objectives of law enforcement officers, fire fighters, other persons who protect the public safety, or veterans, or any person who in any manner employs a charitable appeal or an appeal which suggests that there is a charitable purpose as the basis for any solicitation. "Charitable organization" does not include the department of revenue collecting voluntary contributions for organ and tissue donations under the provisions of sections 42-2-107 (4) (b) (V) and 42-2-118 (1) (a) (II), C.R.S.
(2) "Charitable purpose" means any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public health, environmental conservation, civic, or other eleemosynary purpose, any objective of law enforcement officers, fire fighters, other persons who protect the public safety, or veterans, or any objective of sponsoring the free or subsidized attendance of persons at any event.
(3) "Charitable sales promotion" means an advertising or sales campaign which is conducted by a commercial coventurer and which represents that the purchase or use of goods or services offered by the commercial coventurer will benefit, in whole or in part, a charitable organization or purpose.
(4) "Commercial coventurer" means a person who, for profit, is regularly and primarily engaged in trade or commerce other than in connection with soliciting for charitable organizations or purposes and who conducts a charitable sales promotion.
(5) "Contribution" means the grant, promise, or pledge of money, credit, property, financial assistance, or any other thing of value in response to a solicitation. "Contribution" does not include voluntary contributions for organ and tissue donations under the provisions of sections 42-2-107 (4) (b) (V) and 42-2-118 (1) (a) (II), C.R.S., and bona fide fees, dues, or assessments paid by members of a charitable organization if membership is not conferred primarily as consideration for making a contribution in response to a solicitation.
(6) Repealed.
(7) "Paid solicitor" or "professional fund raiser" means a person who, for monetary compensation, performs any service in which contributions will be solicited in this state by such compensated person or by any compensated person he employs, procures, or engages, directly or indirectly, to solicit for contributions. The following persons are not "paid solicitors" or "professional fund raisers":
(a) A person whose sole responsibility is to print or mail fund-raising literature;
(b) A lawyer, investment counselor, or banker who, in his professional capacity, advises a person to make a charitable contribution;
(c) A bona fide volunteer; or
(d) A director, officer, or compensated employee who is directly employed by a charitable organization which, at the time of the solicitation, had received a determination letter from the internal revenue service granting the organization tax-exempt status pursuant to 26 U.S.C. sec. 501 (c) (3), (c) (4), (c) (8), (c) (10), or (c) (19). For purposes of this paragraph (d), such a determination letter shall not have retroactive effect.
(e) Any employee of the department of revenue collecting voluntary contributions for organ and tissue donations under the provisions of sections 42-2-107 (4) (b) (V) and 42-2-118 (1) (a) (II), C.R.S.
(8) "Person" means an individual, a corporation, an association, a partnership, a trust, a foundation, or any other entity however organized or any group of individuals associated in fact but not a legal entity.
(9) Repealed.
(10) "Solicit" or "solicitation" means to request, or the request for, directly or indirectly, money, credit, property, financial assistance, or any other thing of value on the plea or representation that such money, credit, property, financial assistance, or other thing of value, or any portion thereof, will be used for a charitable purpose or will benefit a charitable organization. The term "solicit" or "solicitation" shall include, but need not be limited to, the following methods of requesting or securing such money, credit, property, financial assistance, or other thing of value:
(a) Any oral or written request; or
(b) Any sale or attempted sale of or any offer to sell any advertisement, advertising space, book, card, tag, coupon, device, magazine, membership, merchandise, subscription, flower, ticket, candy, cookies, or other tangible item in which any appeal is made for any charitable organization or purpose, or for which the name of any charitable organization is used or referred to in any such appeal as an inducement or reason for making any such sale, or for which any statement is made that the proceeds or any portion thereof from such sale will be used for any charitable purpose or will benefit any charitable organization. A "solicitation" shall be deemed to have taken place whether or not the person making the "solicitation" receives any contribution.
(11) "Solicitation campaign" means a series of solicitations which are made by the same person and which are similar in content or are based on a similar pitch or sales approach, which series leads up to or is represented to lead up to an event or lasts or is intended to last for a definite period of time. If the series of solicitations lasts or is intended to last for an indefinite period of time or for more than one year, a "solicitation campaign" means all similar solicitations made by the same person occurring within a particular calendar year.
(12) "Volunteer" means a person who renders services to a charitable organization or for a charitable purpose and who neither receives nor is expressly or impliedly promised financial remuneration for said services.
6-16-104. Notice and reporting requirements. (1) Prior to the commencement of a solicitation campaign, a paid solicitor, or a charitable organization on the behalf of which the paid solicitor has been retained for the solicitation campaign, shall file with the secretary of state a completed solicitation notice, on forms prescribed by the secretary of state, which shall contain the following:
(a) A copy of any contract between the paid solicitor and any charitable organization;
(b) The full legal name and address of the paid solicitor who will be conducting the solicitation campaign;
(c) The address where records and accounting concerning the solicitation campaign are being kept and will be kept;
(d) A statement, not in violation of section 6-16-111 (1) (f) or (1) (g), of the nature of the intended solicitation campaign, including the means of communication to be used in the solicitation campaign, the projected commencement and conclusion dates, and a description of any event the solicitation campaign will lead up to;
(e) A statement, not in violation of section 6-16-111 (1) (f) or (1) (g), of the charitable purpose for which the solicitation campaign is being carried out; and
(f) A certification statement by the charitable organization on the behalf of which the paid solicitor is acting, certifying that the solicitation notice and accompanying material are true and complete to the best of its knowledge.
(2) Within ninety days after a solicitation campaign has been concluded, a paid solicitor, or a charitable organization on the behalf of which the paid solicitor has been retained for the solicitation campaign, shall file with the secretary of state a financial report for such campaign, including gross proceeds and an itemization of all expenses or disbursements for any purpose. The report shall be signed by the paid solicitor, or an authorized official thereof, and by an authorized official of any charitable organization on the behalf of which the solicitation campaign was conducted. Said persons shall certify that the financial report is true and complete to the best of their knowledge.
(3) A filing fee, determined and collected pursuant to section 24-21-104 (3), C.R.S., shall accompany each solicitation notice or financial report filed.
(4) All notices and reports filed pursuant to this section shall be available for public inspection.
(5) and (6) Repealed.
6-16-104.5. Additional reporting requirements. (Repealed)
6-16-105. Written confirmation of contribution - disclosures. (1) A paid solicitor who makes an oral solicitation by telephone, door-to-door, or otherwise shall furnish to each contributor, prior to collecting or attempting to collect any contribution, a written confirmation of the expected contribution, which shall contain the following information clearly and conspicuously:
(a) The full legal name, address, and telephone number of the employer of the individual paid solicitor who directly communicated with the contributor;
(b) A disclosure that the contribution is not tax deductible, if such disclosure is applicable;
(c) A disclosure in capital letters of no less than ten-point, bold-faced type identifying the paid solicitor as a paid solicitor or professional fund raiser;
(d) The address and telephone number of the telephone room or other location from which the solicitation has been or is being conducted if such information is different than that which is provided pursuant to paragraph (a) of this subsection (1); except that this information is not required to be provided if telephone solicitations are being conducted from more than one location and from the residences of the individual paid solicitor or professional fund raiser;
(e) The name, address, and telephone number of any charitable organization connected with the solicitation or any organization the name or symbol of which has been used in aid of or in the course of such solicitation;
(f) The amount of any expected monetary contribution;
(g) The name and address of the contributor, as well as the date of the individual solicitation, or spaces where this information may be filled in by the contributor.
(2) If the contributor is absent when the contribution is to be collected, the paid solicitor may comply with subsection (1) of this section by furnishing the written confirmation in a manner previously agreed upon between said solicitor and the contributor.
(3) Except for the amount of the expected contribution, a written solicitation shall contain the same information as is required in subsection (1) of this section.
6-16-105.5. Solicitations by container - disclosures. (1) No person or charitable organization, or agent of a person or charitable organization, whether paid or not paid, shall place any container offering a product for sale or distribution in a public place for solicitation purposes unless the container is affixed with a disclosure label conspicuously displaying the information set forth in subsection (2) of this section in a typed or printed clearly legible form.
(2) The disclosure label required pursuant to subsection (1) of this section shall state the following:
(a) The percentage of annual contributions that are paid to any person or organization to maintain, service, or collect the contributions deposited in all the containers used by the person or charitable organization;
(b) The percentage of annual contributions that are paid to the charitable organization specified on the container;
(c) Whether the person maintaining, servicing, or collecting the contributions deposited in the container is a volunteer or is paid for the services.
(3) For purposes of this section, "container" means a box, carton, package, receptacle, canister, jar, dispenser, or machine.
(4) Nothing in this section shall be construed as restricting, superseding, abrogating, or contravening any state or federal law or regulation regarding charitable solicitations.
6-16-106. Contributor's right to cancel. (1) In addition to any right otherwise provided by law with respect to the binding nature of an agreement or pledge to make a charitable contribution, a contributor shall have the right to cancel his agreement or pledge to contribute as follows:
(a) With respect to a solicitation in which the paid solicitor knowingly fails to comply with this article, at any time; or
(b) Until 12 midnight of the third business day, or with respect to a nonmonetary contribution, until 12 midnight of the first business day after the day on which the contributor receives a written confirmation of contribution pursuant to section 6-16-105.
(2) Cancellation occurs when the contributor gives written or oral notice of the cancellation to the paid solicitor at the address or telephone number stated in the written confirmation of contribution.
(3) Notice of cancellation, if given by mail, is given at the time it is properly addressed and deposited in a mail box with proper postage.
(4) A particular form shall not be required for a notice of cancellation, and such notice shall be sufficient if it indicates the intention of the contributor to cancel his pledge to contribute.
(5) Within ten days after a notification of cancellation has been received by the paid solicitor, the paid solicitor shall tender to the contributor any contribution made and any note or other evidence of indebtedness.
(6) Allowing for ordinary wear and tear or consumption of the goods contemplated by the transaction, within a reasonable time after an agreement or pledge to contribute has been cancelled, the contributor upon demand must tender to the paid solicitor any goods or items delivered by the paid solicitor in connection with the contribution but shall not be under obligation to tender at any other place than where the goods or items were delivered. If the paid solicitor fails to demand possession of the goods or items within a reasonable time after cancellation, the goods or items become the property of the contributor without obligation to contribute. For purposes of this subsection (6), forty days is presumed to be a reasonable time.
6-16-107. Donated tickets - sponsored attendance. No person, in the course of or in aid of a solicitation, shall represent that a contribution will purchase a ticket or tickets to be donated for use by another, sponsor the attendance of another at an event, or sponsor the receipt of a benefit by another while knowing that the donated tickets or sponsorships will not actually be used or received by the donees or beneficiaries in the quantity represented.
6-16-108. Publications. (Repealed)
6-16-109. Records - accounts. (1) During each solicitation campaign, a paid solicitor shall create and maintain, for not less than two years after the completion of such campaign, the following records:
(a) Copies of all written confirmations or any standardized written confirmations provided pursuant to section 6-16-105;
(b) The name and residence address of each employee, agent, or other person involved in the solicitation as is on record at the time of such solicitation;
(c) The locations and account numbers of all bank or other financial institution accounts into which the paid solicitor has deposited receipts from the solicitation;
(d) Records indicating the quantity of donated tickets or sponsorships, as described in section 6-16-107, which were actually used or received by donees or beneficiaries;
(e) A complete record and accounting of the receipts and disbursements of funds derived from any solicitation campaign. Said record and accounting shall clearly identify any person or organization to whom or to which any part of such funds are transferred and shall describe with specificity the purpose for which any expenditure is made and the amount of each expenditure. Funds spent directly for any charitable purpose or transferred to any charitable organization as represented in the solicitations shall be clearly delineated as such.
(f) All written records relating to pitches, sales approaches, or disclosures used during any solicitation campaign and all instructions provided to paid solicitors concerning the content or solicitations;
(g) All contracts or agreements made with charitable organizations or other represented beneficiaries of solicitations; and
(h) For each contribution, records indicating the name and address of the contributor, the amount of the contribution if monetary, and the date of the contribution, together with the name of the individual paid solicitor who solicited the contribution.
(2) Any person involved in solicitations who claims an exemption from the definition of paid solicitor in section 6-16-103 (7) shall maintain records of ruling letters and other communications from the internal revenue service regarding tax-exempt status. Failure to produce such records on written demand of the district attorney pursuant to section 6-16-111 (1) (e) shall give rise to a rebuttable presumption that the person does not have a ruling letter granting tax-exempt status pursuant to 26 U.S.C. sec. 501 (c) (3).
(3) Each monetary contribution in the custody of a paid solicitor shall be deposited in an account at a bank or other federally insured financial institution in its entirety and within ten days after its receipt.
6-16-110. Charitable sales promotions. (1) The provisions of this article relating to commercial coventurers and charitable sales promotions shall apply only when a commercial coventurer reasonably expects that more than one-half of all proceeds of a solicitation campaign will be derived from transactions within the state of Colorado.
(2) A commercial coventurer shall disclose in each advertisement for a charitable sales promotion the dollar amount or percent per unit of goods or services purchased or used that will benefit the charitable organization or purpose. If the actual dollar amount or percentage cannot reasonably be determined prior to the final date of the charitable sales promotion, the commercial coventurer shall disclose an estimated dollar amount or percentage. Any such estimate shall be reasonable and shall be based upon all of the relevant facts known to the commercial coventurer regarding the charitable sales promotion.
(3) A commercial entity which purchases at wholesale a product which is created, manufactured, or produced by a charitable organization for resale to the general public as part of the commercial entity's general stock of merchandise shall be exempt from the provisions of this article relating to commercial coventurers and charitable sales promotions.
6-16-111. Violations. (1) A person commits charitable fraud if he:
(a) Knowingly solicits any contribution and in the course of such solicitation knowingly performs any act or omission in violation of any of the provisions of sections 6-16-104 to 6-16-107 and 6-16-110;
(b) Knowingly solicits any contribution and, in aid of or in the course of such solicitation, utilizes the name or symbol of another person or organization without written authorization from such person or organization for such use;
(c) Solicits any contribution and, in aid of or in the course of such solicitation, utilizes a name, symbol, or statement which is closely related or similar to that used by another person or organization with the intent to mislead the person to whom the solicitation is made that said solicitation is on the behalf of or is affiliated with such other person or organization;
(d) With the intent to defraud, knowingly solicits contributions and, in aid of such solicitation, assumes, or allows to be assumed, a false or fictitious identity or capacity, except for a trade name or trademark registered in this state by that person or his employer;
(e) Knowingly fails to create and maintain all records required by section 6-16-109 to be created and maintained or knowingly fails to make available said records for examination and photocopying at the office of the district attorney or at his own office in this state with copying facilities furnished free of charge, within five days after a written demand for the production of said records by the district attorney, or within twenty days with respect to records kept out of state;
(f) Knowingly makes a misrepresentation of a material fact in any notice, report, or record required to be filed, maintained, or created by this article; or
(g) With the intent to defraud, devises or executes a scheme or artifice to defraud by means of a solicitation or obtains money, property, or services by means of a false or fraudulent pretense, representation, or promise in the course of a solicitation. A representation may be any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a material fact.
(2) Any person who commits charitable fraud in violation of paragraph (b), (c), (d), (f), or (g) of subsection (1) of this section is guilty of a class 5 felony, and upon conviction thereof, shall be punished in accordance with section 18-1-105, C.R.S.
(3) Any person who commits charitable fraud in violation of paragraph (a) or (e) of subsection (1) of this section is guilty of a class 2 misdemeanor and upon conviction thereof, shall be punished in accordance with section 18-1-106, C.R.S.; except that a person who commits a violation of either of said paragraphs which occurs with respect to solicitations involving three separate contributors in any one solicitation campaign is guilty of a class 5 felony, and upon conviction thereof, shall be punished in accordance with section 18-1-105, C.R.S.
(4) Charitable fraud which is a felony shall be deemed a class 1 public nuisance and subject to the provisions of part 3 of article 13 of title 16, C.R.S.
(5) Violation of any provision of this article also shall constitute a deceptive trade practice in violation of the "Colorado Consumer Protection Act", article 1 of this title, and shall be subject to remedies or penalties, or both, pursuant thereto.
6-16-112. Service of process. Any foreign corporation performing any of the acts prohibited under this article through any salesman or agent is subject to service of process either upon the registered agent specified by said corporation or upon the corporation itself if no agent is specified pursuant to section 7-115-111, C.R.S. Service of process upon any individual outside this state based upon any action arising out of matters prohibited by this article shall be pursuant to section 13-1-125, C.R.S.
6-16-113. Severability. If any provision of this article is found by a court of competent jurisdiction to be unconstitutional, the remaining provisions of this article shall be valid, unless it appears to the court that the valid provisions of this article are so essentially and inseparably connected with, and so dependent upon, the void provision that it cannot be presumed that the general assembly would have enacted the valid provisions without the void provision or unless the court determines that the valid provisions, standing alone, are incomplete and are incapable of being executed in accordance with the legislative intent.
|