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The Judge
The Judge, Business Law Attorney
Category: Business Law
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Experience:  Active business lawyer, business owner, & former judge. Over 30 years experience in business law.
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Our California 501 (c) 3 non profit public charity is ...

Resolved Question:

Our California 501 (c) 3 non profit public charity is looking to hire an individual with experience to raise funds for our charity. We have not signed a contract however in initial negotiations they are requesting a flat fee and a percentage/commission of funds they personally raise. As an individual do they need to be registered with the Attorney General's office and is it legal in California for a professional fundraiser to charge a commission based fee to raise funds?
Submitted: 9 years ago.
Category: Business Law
Expert:  The Judge replied 9 years ago.

I'll answer your second question first: Yes, it is legal in California for a professional fundraiser to charge a commission based fee to raise funds. In fact, it is very common.

As for your first question, California law requires every professional fundraiser, whether the fundraiser is an individual, a partnership, or a corportation, to file an unaudited financial report with the the Attorney General's (AG) office every year. That's not quite the same thing as simply "registering" with the AG's office. But it is significant for you because the AG does oversee the fundraiser and the AG makes the reports of all professional fundraisers available to you so that you may conduct your own due diligence.

You may find this link from the AG's website helpful. It gives a brief summary of the law and serves as a portal to all of the reports from all professional fundraisers.

Look for your fundraiser's reports from that web page. If your fundraiser has supplied reports, then review them and come to your own conclusion.

If your fundraiser is not listed, you must ask yourself: why not? The fundraiser is either new, or simply not filing an annual report. Again. you have to ask yourself, why not?

I hope this answers your questions. If there is anything you do not understand, please let me know and i will be happy to elaborate.

In the meantime, please click "Accept" so that I may be paid for my answers and any subsequent follow ups with you.


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