California’s AB488 law introduces important updates to charitable fundraising regulations for brands operating in the state. These provisions officially go into effect in January 2025.
What is AB488?
AB488, also known as the Charitable Fundraising Platforms Act, establishes new rules for online charitable fundraising platforms and platform charities. The law enhances transparency, accountability, and consumer protection in fundraising.
Key Regulations Brands Must Follow
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1. Written Agreements with Charities
- Establish a written agreement with any charity you support.
- Ensure the agreement outlines fundraising terms, fund disbursement timelines, and any fees deducted from the donations.
2. Transparency with Donors
- Disclose all fees associated with the donation process.
- Clearly communicate which charity is receiving the funds and the percentage of each donation going to the cause.
3. Registration with the California Attorney General
- Your business must register as a charitable fundraising platform if you facilitate donations in California.
- Annual reporting to the Attorney General is mandatory, detailing the charities you’ve supported and the funds raised.
4. Timely Disbursement of Funds
- Donations must be disbursed to charities within 90 days unless otherwise agreed in writing.
5. Protect Donor Privacy
- Adhere to California’s Consumer Privacy Act (CCPA) to safeguard donor information.
- Provide clear opt-in options for donors to consent to sharing their data with third parties.
6. Charity Vetting
- Ensure that the charities you fundraise for are properly registered and in good standing with the IRS and the California Attorney General.
7. Reporting Requirements
- Keep detailed records of all transactions and make them available upon request by state regulators.
What Are the Penalties for Non-Compliance?
Failure to comply with AB488 can result in:
- Fines and penalties imposed by the California Attorney General.
- Legal action by donors or affected charities.
- Damage to your brand’s reputation.
What Can Your Brand Do to Stay Compliant?
- Work with Trusted Platforms: Partner with fundraising solutions like Shop for Good, which ensures your campaigns align with state regulations.
- Regularly Review Practices: Conduct internal audits to verify compliance with AB488.
- Seek Legal Counsel: If you’re unsure about your obligations, consult with a legal expert specializing in charity law.
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