# Amicus Curiae Brief — Illinois Ex Rel. Madigan, Attorney General of Illinois v. Telemarketing Associates, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2003
- **Citation:** 538 U.S. 600

## Text

FOR ARGUMEAT —~\ Suprers.: Cout, w
(92) | FILE!
JAN 23 2003

No. 01-1806
IN THE CLERK
)

Supreme Court of the United Stare

THE PEOPLE OF THE STATE OF ILLINOIS
ex rel. JAMES E. RYAN, ATTORNEY GENERAL
OF THE STATE OF ILLINOIS,
Petitioner,

V.

TELEMARKETING ASSOCIATES, INC.,
RICHARD TROIA and ARMET, INC.,
Respondents.

On Writ of Certiorari to the Supreme Court of Illinois

BRIEF OF AMICI CURIAE PUBLIC CITIZEN, INC.,
AMERICAN CHARITIES FOR REASONABLE
FUNDRAISING REGULATION, INC., AND
174 OTHER NONPROFIT ORGANIZATIONS
IN SUPPORT OF RESPONDENTS

BONNIE I. ROBIN- VERGEER
Counsel of Record

ALAN B. MORRISON

PUBLIC CITIZEN LITIGATION GROUP

1600 20th Street, N.W.

Washington, D.C. 20009

(202) 588-1000

JANUARY 2003 Counsel for Amici Curiae

i
QUESTION PRESENTED

Whether the First Amendment bars a State from pursuing
an action for fraud against a professional fundraiser soliciting
contributions on behalf of a charitable organization when the
allegation of fraud is based solely on the fact that the fundraiser
described tod prospective donors the charitable purposes for
which funds were being solicited without divulging the
percentage of gross contributions that the charity would pay the
fundraiser for its services.

ii

TABLE OF CONTENTS
Page
QUESTION PRESENTED .............00eeeeeeeees
TABLE OF AUTHORITIES ............ceccecceces iv
INTERESTS OF AMICI CURIAE ..........0.0000005 1
STATEMENT OF THE CASE ........-eccceceeceees 2
SUMMARY OF ARGUMENT ..........cceeceeceees 4
ARGUMIBNT .....o ae ee passim
USA Patriot Act of 2001, Pub. L. No. 107-56, § 1011
i 29
18 U.S.C. §§ 1341, 1343 ccccccccssccsssscsvecsssseessnessessensneseenen 28
I

26 U.S.C. § 501(C)(3) -esceeseseees “a aR Gee ns Me 29

26 U.S.C. § 501(C)(4)(B) cosccscscssssssececcscesssssssseseseenessnseseneeee 29
SI IE siccciccceansieisicienctetateeni 29
I I cincinnati 26
16 C.F.R. 310.3(d) & 310.4(€) (Dec. 2002) ..ccecscssssssseeeenee 29
26 C.F.R. § 1.501(c)(3)-1(a)(1) (2002) sesccccsssssssssveeeeeeeensen 29
26 C.F.R. § 1.501(c)(3)=1(C)(2) (2002) .essscssssseeseeesssseeseeee 29
26 C.F.R. Parts 53, 301 & 602 (2002) ...ccccssssssssssssseeeeeeseee 29

Illinois Solicitation for Charity Act
(225 Ill. Comp. Stat. 460/1):

ee > GR GRD, Ge erserscesecscncensececsnseamnemerecsnemes 25
225 Ill. Comp. Stat. 460/2(a) ..........scscccscssesesseeeseereees 25
BBS TE, Camp. BERR. SEALED nccccccvecccccsscsesscccscccsscnsevcees 25
SD Ce I GR, Ge cocenssevsnsenstescescscenessecessssesesns 25
ee GI ER, GI ercececevccczesencvcccececsesccersesssesees 25
225 Til. Comp. Stat. 460/6.5 ........ccscccsrosssssssssssesseseeees 25
22S Til. Cont. Stat. 460/7(a) ...0rceccscorcrscrsrecrveescsseesees 25
a 25
225 Ill. Comp. Stat. 460/9(1) .........:ccssseresssssessseesensseees 25
225 Ill. Comp. Stat. 460/17(a) ..........sccssscssseseesseceensees 14
I 15
225 Ill. Comp. Stat. 460/18(b) .........:cccccssssreesereeenes 12
MISCELLANEOUS

Attorney General Jim Ryan, Charity Fraud:
Investigate Before You Donate, available at
http://www.ag.state.il.us/charitable/
CREE cccncnennescernemnninneene 9

ix

Gary Ellis, Making a Connection: DialAmerica Helps
Raise Awareness and Funds for MADD '’s Mission,
DRIVEN Magazine (Fall 2002), available at
http://www.madd.org/news/0,1056,5616,00.htm! ...... 13

Florida Gift Givers’ Guide: A Guide to Charitable
Giving in Florida (2002-2003), available at
http://www.800helpfla.com/~cs/
Se IID cthstnnintcicnntsennssmenesenenmmmmennee 25

Bruce R. Hopkins & D. Benson Tesdahl,
Intermediate Sanctions: Curbing Nonprofit Abuse
SITE -cciteseramereninntaiemnsiennnietenatneenienmnemnneene 29, 30

Bruce R. Hopkins, The Law of Fundraising
en 9, 10, 11, 29, 30

http://justice.hdcdojnet.state.ea.us/charitysr/default.asp .... 25

http://www.ag.state.il.us/charitable/charitydb.htm] ........... 25
http://www.citizen.org/about/articles.cfm?ID=5165 sennens 26
http://www.secstate.wa.gov/ charities/search.aspx ............ 26
Harvy Lipman, Calling Solicitors to Account,

XIII Chronicle of Philanthropy,

FR GTS centeetetenntieiemenmemnene 10, 14, 26

Henry C. Suhrke, The Future of Fundraising,
XXXII Philanthropy Monthly, Apr. 4, 1999 ................. 3

Henry C. Suhrke, What Can Be Done About Fund Raising
“Fraud"’?, XXVI Philanthropy Monthly,
SOUND, GOD cennscccnscssesccscnssenssscesendstennnesnenscsessnaneceecse 14

x

James M. Greenfield, The Nonprofit Handbook: Fund
Betetee GOB 66. BGT cccccecssenccsenssnscessesssssemnesmnansecscsnvese 9

New York State Department of Law, Charities Bureau,
Pennies for Charity: Where Your Money Goes
(Dec. 2002), available at http://www.oag.state.ny.us/
charities/penniesO2/penintro. html ............cccceeeeeeeesees 25

Press Release, Charity Scam Highlights Need for Scrutiny
in Making Donations (Dec. 12, 2000),
available at http://www.oag.state.ny.us/press/2000/dec/
GOED ccecenenesercscsrmasssseneemmenmnenennmenenn 28

Press Release, Settlement with United Children’s Fund
Permanently Bars Charity From Operating in
New York (Apr. 2, 2001), available at
http://www.0oag.state.ny.us/press/200 1/apr/
CT, RID cetittnecnnnennneccnsstcssssstietammscmmenmessecsen 28

Tips for Informed Charitable Giving, available at
http://www.ag.state.il.us/charitable/charitygive.htm .. 26

United States General Accounting Office,
September 11: Interim Report on the
Response of Charities (Sept. 2002) ......ccccccccsesceeeeeeeeees 3

United States General Accounting Office,
Tax-Exempt Organizations: Improvements
Possible in Public, IRS, and State Oversight
of Charities (Apr. 2002) ...........cssscssssssssssseseeseees 9,19, 11

U.S. Census Bureau, Statistical Abstract of the
United States 2001, No. 561, available at
http://www.census.gov/prod/2002pubs/
SEIS cnreennnentiensnenstinncstnsterrsnnenscsneseectones 2

CF IE GEED, censcsersennenennentnceennmenemmcnen a

xi
Le 26
Sr i abeuisaeusaionailiniee 26
I csectistineecnsictnnnsansratcsntnsnscianisinsnstinanensnsinnnes 26
WWW. giVe.Org/TEpOrts/ INAEX.ASP ..........escceceesesscessesseeeeseecees 26
ITTY cerscicsshiesersinsinnainenconesidiniansesitanetetpiiiciemengttideats 26
I NOIEEEE dienusecccnsenisnenensienssnccienenensenianieasiantatitanaiianmnanenis 26

INTERESTS OF AMICI CURIAE

This brief in support of respondents is submitted by Public
Citizen, Inc., American Charities for Reasonable Fundraising
Regulation, Inc., and 174 other nonprofit organizations. Amici,
who are listed in the Appendix to this brief, are public charities
or other nonprofit organizations exempt from federal taxation
pursuant to various subsections of Section 50l(c) of the
Internal Revenue Code.'

The missions and viewpoints of amici vary greatly, but all
rely primarily on the public for financial support. Amici do not
take a position on the telemarketing contracts at issue here, but
submit this brief to express their concern about the prospect
that the Attorney General of Illinois (as well as state and local
regulators across the country) may be given the power to
pursue a fraud action, carrying the possibility of criminal
penalties or severe civil sanctions, based on nothing more than
the fact that a professional solicitor described the charitable
purposes for which funds were solicited without also
volunteering to prospective donors the organization’s supposed
“fundraising costs.”

Although Illinois brought this case against an outside
professional fundraiser, its theory, if successful, also would
allow the State to make a claim of fraud against any charity
that conducts solicitations using in-house staff rather than
outside fundraisers. See Secretary of State v. Joseph H.
Munson Co., 467 U.S. 947, 967 n.16 (1984). Therefore, many
of the amici, who may do much of their fundraising in-house
(with or without the help of consultants generally paid on a fee- _
for-service rather than a percentage basis) could also
potentially be defendants for not disclosing what the State now
contends—without any advance notice—was so excessive a

' No counsel! for any party to this case authored this brief in whole or in
part, and no person or entity other than amici and their counsel made any
monetary contribution to its preparation and submission. The parties’
letters consenting to the filing of this brief have been filed with the Clerk
of the Court.

2

fundraising cost as to leave a “misleading impression” with
donors regarding how their contributions would be spent.

The State’s theory would cover not only telemarketing, the
form of solicitation involved here, but all other forms of
solicitation, from special events to direct mail, including
solicitations prepared in-house, as is done by many amici. And
if Illinois can require charities, to avoid a fraud charge, to make
affirmative disclosures regarding the amount of money that
they spend on fundraising, so can other states and localities.
Given the considerable differences of opinion regarding how
fundraising costs should be calculated, the imposition of
diffuse and ill-defined state-by-state requirements for all
manner of charitable solicitations could severely cripple
charities’ efforts to fulfill their missions.

Amici are filing this brief to alert the Court both to the
dangers to all charities posed by the State’s newly minted
notion of fraud and to the existence of far less intrusive means,
consistent with the First Amendment, of assisting donors in
making informed choices about charitable giving and of
protecting charitable assets from overreaching by professional
fundraisers or wasting by charities.

STATEMENT OF THE CASE

i. In the aftermath of a trilogy of decisions by this
Court in the 1980s extending full First Amendment protection
to charitable solicitation, Riley v. National Fed’n of the Blind
of North Carolina, 487 U.S. 781 (1988); Secretary of State v.
Joseph H. Munson Co., 467 U.S. 947 (1984); Village of
Schaumburg v. Citizens for a Better Environment, 444 U.S. 620
(1980), general appeals to the public for charitable
contributions have flourished, and the public has answered the
call. In the 1990s, the level of public support for charities more
than doubled, from $101.4 billion in contributions in 1990 to
$203.5 billion in 2000. U.S. Census Bureau, Statistical
Abstract of the United States 2001, No. 561, available at
http://www.census.gov/prod/2002pubs/01 statab/socinsur.pdf.

Demand for charitable services soared to new heights after

3

the events of September 11, 2001. Hundreds of charitable
organizations stepped up to the task, helping thousands of
people directly and indirectly affected by the attacks. See
United States General Accounting Office, September 1/1:
Interim Report on the Response of Charities 2, 4 (Sept. 2002).
To meet this new, as well as historical, demand, charities
require funding from the public; securing that funding requires
communication with the public. To raise funds, a charity must
educate donors that a particular problem exists, that the charity
is addressing the problem, and that the donor can help by
donating funds. Henry C. Suhrke, The Future of Fundraising,
XXXII Philanthropy Monthly, Apr. 4, 1999, at 5 (“The key
ingredient to giving—and to increased giving as well—is
asking.”). To thrive, charities require “breathing space,”
NAACP v. Button, 371 U.S. 415, 433 (1963), to experiment
with innovative outreach methods, whose purpose can be as
much to educate and engage the public as to raise funds. Such
solicitations are often costly, combining a description of a
group’s charitable mission and a “call to action” urging the
public to join in its cause, with a request for a donation. See
Buckley v. Valeo, 424 U.S. 1, 19 (1976) (“[V]irtually every
means of communicating ideas in today’s mass society requires
the expenditure of money.”). To help in these efforts, charities
frequently turn to outside professional fundraisers.

Both the states and the federal government have important
oversight responsibilities to ensure that charities are operated
for charitable purposes and that neither charities nor those
soliciting the public on their behalf (whether in-house staff,
volunteers, or outside fundraisers) abuse their right to solicit
charitable donations from the general public. The question
presented here is whether Illinois’s fraud action in this case
oversteps the proper bounds of state enforcement authority and
infringes the First Amendment rights of professional
fundraisers and charities.

2. In this case, respondents are professional fundraisers
who called individuals to solicit donations to VietNow
National Headquarters (““VietNow’”’), pursuant to their contracts

4

with the charity. In the course of those exchanges, they
described VietNow’s charitable purposes of providing 10d,
shelter, and financial support for Vietnam War veterans, but
did not disclose that VietNow had agreed to pay them 85
percent of the gross receipts collected, a fee Illinois claims is
excessive. Am. Compl. § 32 (J.A. 9). The 85-percent fee
covered both fundraising and programmatic expenses, as the
fundraisers agreed to produce, publish, edit, and pay associated
expenses for a periodic publication “to increase community
awareness” of VietNow. J.A. 21, 36. Although the United
States attempts to portray the State’s ensuing fraud action as
predicated on intentional misrepresentations, U.S. Br. 15-22, its
theory diverges sharply from that upon which Illinois has
litigated this case. The State does not claim that the fundraisers
made intentional affirmative misrepresentations to prospective
donors, but predicates its fraud action on an implied
misrepresentation theory: that given the fundraisers’ allegedly
excessive fees, their solicitations describing the charitable
purposes for which funds were sought were misleading because
donors supposedly expected “much more” of their donations to
be used for charitable services. See, e.g., State Br. 5, 9, 12, 44;
Am. Compl. {9 37-38, 67F-I, 67K-O, 74 (J.A. 10, 85-88, 104).
The Illinois Supreme Court also construed this action as
premised on the fundraisers’ allegedly misleading omissions.
763 N.E.2d 289, 291 (2001) (“{T]here is no allegation that
defendants made affirmative misstatements to potential
donors.”’).

The Illinois trial court dismissed the State’s amended
complaint against the fundraisers. Relying on the
Riley/Munson/Schaumburg trilogy of decisions addressing the
regulation of charitable solicitation, both the Illinois Appellate
Court and Illinois Supreme Court affirmed.

SUMMARY OF ARGUMENT

The public’s confidence in the integrity and honesty of the
philanthropic sector is vital to the success of charitable
organizations across the country. Amici therefore do not

5

oppose the efforts of federal and state regulators to root out
genuine fraud—indeed, they agree with the states and the
United States that appropriate government regulation of
charitable solicitation serves legitimate governmental interests
(as well as their own) in preventing, detecting, and prosecuting
fraud. Moreover, amici do not object to government regulators
punishing false statements regarding how charitable
contributions will be allocated (e.g., solicitors informing
potential donors that a specific percentage of funds will be used
for charitable purposes, knowing that statement to be false).
Finally, amici do not ask this Court to hold that the State has no
authority to bring a fraud action unless a charity or professional
fundraiser has engaged in “outright lies” or “literal
falsehoods.” See State Br. 16, 31, 39. There is no dispute that
the State has the power to punish implied misrepresentations
regarding verifiable facts, see id. at 9, 17, 23, 32, 34, including
solicitations made under false pretenses.

The problem with the fraud action Illinois has pursued in
this instance, however, is that the percentage of charitable
contributions to be used to defray fundraising costs, which the
State maintains should have been disclosed by the professional
fundraisers to avoid leaving a misleading impression, is not
“factual,” “verifiable,” or even meaningful. See id. at 5, 9, 12,
44 (arguing that donors expected that “much more” of their
contributions would be spent on charitable purposes, without
specifying how much more). As this Court repeatedly has
recognized, fundraising cost information is of ma., inal, if any,
relevance to an assessment of a charity’s legitimacy or
efficacy. Indeed, there is no consensus as to what figure best
represents a fundraising cost percentage or how such a figure
should be derived. The State’s fraud action is thus an
attempted end-run around this Court’s holding in Riley that
states may not require professional solicitors to disclose to
potential donors the percentage of charitable funds to be turned
over to the charity—a holding that the State discusses in its
brief only as an afterthought. See id. at 46-48.

This case involves an after-the-fact judgment by a state

6

attorney general regarding when the failure to disclose a
fundraising cost percentage to prospective donors constitutes
fraud. As such, it represents a far more heavy-handed
approach, with a far more acute risk of chilling fully protected
speech by charities, than the more clearly defined (but also
unwarranted) prophylactic point-of-solicitation disclosure
requirement struck down in Riley. As the State concedes,
charities and fundraisers are entitled to “fair notice” regarding
speech that is proscribed or prescribed. No “authoritative
judicial construction” of fraud in Illinois or elsewhere, State
Br. 28, however, provides such fair warning of the point at
which “fundraising costs” become so high as to render a
description of a charity’s charitable services misleading (on the
theory that a donor would have expected “much more” of her
donation to be used for such services). The multitude of
imprecise formulations offered by the State, e.g., State Br. i
(“vast majority”), 16 (“trifling amount”), 42 (“negligible
amount actually used”), 44 (“insignificant degree”) highlight
the dangers of the broad authority the State seeks here and the
jeopardy in which it places charities and fundraisers.

This Court need not bless a fraud action of this type either
to ensure that the public possesses adequate information to
make wise choices about charitable giving or to preserve state
and federal regulators’ ability to punish and prevent genuine
fraud or shut down charities that do not operate for charitable
purposes. The notion that donors have little chance to learn
how their donations will be used is anachronistic given the
prodigious amount of financial and other information regarding
charities published (and publicized) by the states themselves
and by charity watchdog groups, typically on the Internet at no
charge. Finally, state and federal regulators already have an
ample arsenal of enforcement tools to root out real fraud in
charitable appeals, whether perpetrated through self-dealing,
improper diversion of funds for personal gain, or through false
representations (explicit or implicit) made in charitable
solicitations, and to revoke the charters or tax exemptions of
those charities that do not operate for charitable purposes.

7

ARGUMENT

I. THIS COURT’S DECISIONS IN SCHAUMBURG,
MUNSON, AND RILEY DO NOT AUTHORIZE
STATES TO PURSUE INDIVIDUAL FRAUD
ACTIONS BASED ON A FAILURE TO DISCLOSE
FUNDRAISING COSTS TO POTENTIAL DONORS.

The State argues that this Court’s decisions in
Schaumburg, Munson, and Riley invite a state to proceed in an
ad hoc, retrospective fashion against particular fundraisers
(and, presumably, against charities) for fraud based on their
failure to disclose fundraising costs to dispel an allegedly
misleading impression regarding how donations will be used.
State Br. 22. Not only does the State misread these decisions,
but its argument betrays a lack of appreciation of the profound
chilling effect on charitable speech that would result if state
regulators were permitted to make subjective, post hoc
decisions regarding which charitable solicitations are
fraudulent for failure to divulge a “fact” that, as discussed in
Part I.A., infra, is too elusive to be readily defined and too
peripherally related to the legitimacy of a charity to merit
government-compelled disclosure. If successful, Illinois’s
attempt to find yet another way to dictate the content of the
message solicitors must convey to potential donors would serve
only to hinder charities in their ability to communicate their
charitable appeals and successfully raise funds, while failing to
provide donors with meaningful information regarding the
legitimacy or actual merit of any given charity.

A. There Is No Nexus Between High Fundraising

Costs and Fraud.

1. In 1980, this Court struck down a municipal
ordinance prohibiting the solicitation of contributions by
charitable organizations that do not use at least 75 percent of
their receipts for “charitable purposes.” Village of Schaumburg
v. Citizens for a Better Environment, 444 U.S. 620 (1980).
Although charitable appeals involve requests for funds and are

8

frequently conducted by for-profit professional fundraisers, the
Court explained that because such appeals are
“characteristically intertwined with informative and perhaps
persuasive speech seeking support for particular causes or for
particular views on economic, political, or social issues,” they
are treated as speech fully protected by the First Amendment,
rather than as commercial speech. Jd. at 632. In Schaumburg,
the village defended its restriction as necessary to protect the
public from fraudulent solicitations, but this Court held that the
State’s legitimate interest in preventing fraud was only
“neripherally promoted” by a direct regulation of the amount
of money a charity must devote to its programmatic purposes.
Id. at 636. The Court recognized that fundraising or
administrative costs will be high for those organizations that
are primarily engaged in research, advocacy, or public
education, and indeed, that the costs associated with
fundraising campaigns “can vary dramatically depending upon
a wide range of variables, many of which are beyond the
control of the organization.” Jd. at 636-37 & n.10.
Accordingly, the ordinance was not a “narrowly drawn
regulation[{] designed to serve” the State’s interests “without
unnecessarily interfering with First Amendment freedoms.” /d.
at 637.

In the wake of Schaumburg, states became increasingly
creative in their efforts to restrict the percentage of funds
charities would be permitted to pay their outside fundraisers.
In Secretary of State v. Joseph H. Munson Co., 467 U.S. 947
(1984), and Riley v. National Federation of the Blind of North
Carolina, 487 U.S. 781 (1988), this Court rebuffed those
efforts because they were based “on a fundamentally mistaken
premise that high solicitation costs are an accurate measure of
fraud,” Munson, 467 U.S. at 966; see also id. at 961; accord
Riley, 487 U.S. at 793, and because higher fundraising costs for
a given charity may be attributable to a myriad of legitimate
factors. Riley, 487 U.S. at 791-93; Munson, 467 U.S. at 961.

2. The Court’s recognition in 1988 that fundraising
costs bear only a tenuous relationship, at best, to the question

9

of fraud, see Riley, 487 U.S. at 793 n.7, is no less valid today.
As the General Accounting Office (GAO) recently
acknowledged, spending efficiency continues to vary
depending upon the popularity of the cause, the age of the
charity, the type of charitable activity, and sudden changes in
events. Thus, expense data and related ratios provide little
perspective on how well charities actually achieve their
charitable purposes. United States General Accounting Office,
Tax-Exempt Organizations: Improvements Possible in Public,
IRS, and State Oversight of Charities 18-19 (Apr. 2002)
(“April 2002 GAO Report”).’

There is nothing fraudulent about this state of affairs,
which is recognized by charities, professional fundraisers, and
regulators alike. The Illinois Attorney General’s own
consumer pamphlet acknowledges that “(p]rofessional fund
raisers often charge 80% to 90% of your contribution as a fee.”
Attorney General Jim Ryan, Charity Fraud: Investigate Before
You Donate, available at http://www.ag.state.il.us/charitable/
charity0301.pdf. Certain types of charities, such as groups that
provide human services, have a particularly difficult time
raising funds and accordingly have consistently high
fundraising costs. A 2001 survey of the industry found that
veterans groups, for instance, receive less than 17 percent of

? An institution such as a university or hospital, for example, is likely to
have an established donor base and a wide range of fundraising options and,
accordingly, a relatively low fundraising cost ratio. By contrast, newer
organizations undertaking costly campaigns to increase their donor base are
likely to have relatively high fundraising cost percentages, such as 80 or 90
percent, or even in excess of 100 percent. Bruce R. Hopkins, The Law of
Fundraising 90 (3d ed. 2002); see also id. at 103-04, 362-63. Donor-
acquisition mailings cost more money than they earn in the short-term, as
much as $1.25 to $1.50 to raise $1.00, though they hold out the potential for
long-term gains if new donors give substantial additional funds in
subsequent years. Telemarketing is an even more expensive, though often
more successful, fundraising technique. James M. Greenfield, The
Nonprofit Handbook: Fund Raising 259, 321 (2d ed. 1997); see also
Hopkins, supra, at 24-25, 31, 100.

10

the funds collected by professional solicitors—less than any
other type of charity. Harvy Lipman, Calling Solicitors to
Account, XTll Chron. of Philanthropy, Apr. 5, 2001, at 1, 24.
As the survey notes, a fundraiser that returns a low percentage
of collections to charity has not necessarily acted improperly,
as the percentage may simply reflect the size and type of its
charity clients. Jd. at 24.

Not only are fundraising cost percentages poor indicators
either of fraud or a charity’s intrinsic merit, but there is no
readily ascertainable fundraising percentage or expense figure
available that would constitute a material or verifiable “fact”
that must be disclosed to potential donors. See Hopkins, supra,
at 89-91 (explaining reasons for absence of agreed-upon base
or universal standard for computing fundraising costs or
percentages). As the GAO recently acknowledged, charities
have considerable discretion in determining how to allocate
expenses among the program services, management, and
fundraising categories, differences that can affect comparisons
across charities. Neither the IRS nor professional accounting
accrediting bodies require or prohibit particular allocation
methods, so long as they are reasonable and consistently
applied. April 2002 GAO Report at 2, 8, 13, 16-19; see also
Hopkins, supra, at 105 & n.29. Two organizations may have
identical fundraising expenses and yet derive different
fundraising cost ratios. This fact does not illustrate fraud, but
the lack of uniformity in, and intrinsic malleability of,
fundraising cost allocation methods.’

> Moreover, had the same activities, with the same fundraising expenses,
been conducted by VietNow entirely in-house, there would have been no
“percentage” in a fundraising contract for Illinois to point to as “excessive”
or to contend the charity must disclose to potential donors to dispel any
misleading impression. Yet there would be no economic difference in terms
of the group’s solicitation costs or amounts expended for charitable
services. See Riley, 487 U.S. at 799 (criticizing disclosure requirement’s
discrimination between those charities who must rely on professional
fundraisers and those that conduct their campaigns in-house). The
susceptibility of a fundraiser or charity to prosecution for fraud cannot be

ll

The State’s effort, in other words, to force charities or
fundraisers to attempt to describe fundraising costs to potential
donors as a single percentage not only is not “a meaningful
indicator of anything,” but, even worse, “may be so misleading
as to be counterproductive to the disclosure motive and unfair
to certain categories of charitable groups.” Hopkins, supra, at
90; see also April 2002 GAO Report at 16. An in-house or
outside solicitor’s silence on the issue of fundraising expenses
simply is not an implied misrepresentation of fact. Even apart
from the legitimate variation of fundraising costs among
charities, the states’ insistence on making charitable spending
efficiency the lodestar of their regulatory approach is
fundamentally misguided. Cost of fundraising measures,
however calculated, are of marginal, if any, utility to the
potential donor attempting to ascertain the actual efficacy or
accomplishments of a charity soliciting donations. /d. at 19.

In short, any effort by the government to punish charitable
appeals or to compel crippling, but meaningless, disclosures to
potential donors on the ground that the charity’s fundraising
costs or the professional fundraiser’s fees are “higher than
expected,” both ignores the First Amendment value of these
appeals and discriminates against new, small, or unpopular
charities and those that combine education and solicitation.

B. Riley’s Rationale in Barring States from
Compelling Before-the-Fact Disclosures of
Fundraising Cost Percentages Applies as Surely
to an After-the-Fact Disclosure Requirement.

Illinois insists that regardless of whether the professional
fundraisers’ fee here can be labeled fraudulent in and of itself,
the fundraisers’ failure to disclose that fee to prospective
donors on the spot renders the solicitations fraudulently
misleading because the fundraisers described to donors the
charitable purposes for which funds were being solicited
without also revealing their (allegedly high) fee. To avoid

permitted to turn on such an artificial distinction.

12

leaving a false or misleading impression that “much more” than
a “trifling,” “negligible,” or “insignificant” amount of donated
funds would be used to further VietNow’s charitable purposes,
State Br. 5, 9, 12, 16, 42, 44, the State contends that the
fundraisers were required either to refrain from describing the
charitable purposes for which funds were solicited or to
disclose their fee. State’s Br. 46, 48.

The first alternative, that fundraisers refrain from
disclosing the charitable purposes for which donations are
sought, is not an option. Indeed, Illinois law explicitly
provides that a person soliciting contributions must disclose the
primary program service for which funds will be spent. 225 II.
Comp. Stat. 460/18(b). The only other alternative to avoid the
risk of a fraud action, then, is for charities and fundraisers to
make an affirmative disclosure of fundraising costs in any case
in which the fee is higher than some donor might expect. But
the State cannot compel such speech. Riley, 487 U.S. at 795
(“Mandating speech that a speaker would not otherwise make
necessarily alters the content of the speech.”’); see also Hurley
v. Irish-American Gay, Lesbian & Bisexual Group, 515 U.S.
557, 573 (1995) (the right of the speaker to choose “what not
to say” applies “equally to statements of fact the speaker would
rather avoid”); McIntyre v. Ohio Elections Comm'n, 514 U.S.
334, 348-49 (1995). Although Riley addressed a prophylactic
disclosure requirement, its rationale applies as surely to one
based on a post hoc judgment by a State that the magnitude of
fundraising costs rendered a description of the charitable
purposes for which funds were sought a deceptive “half truth.”

1. Just as Illinois argues here, North Carolina
maintained in Riley that a blanket disclosure to all potential
donors of the percentage of receipts turned over to charity was
necessary “‘to dispel the allege! misperception that the money
they give to professional fundraisers goes in greater-than-actual
proportion to benefit charity.” 487 U.S. at 798. The Court
rejected the proposed disclosure requirement as a content-
based regulation of speech, id. at 795, for several reasons all
fully applicable in this case.

13

First, the Court reasoned, North Carolina’s disclosure
requirement incorrectly presumed that the charity derived no
benefit from funds collected but not turned over to it. As the
Court had made clear in Schaumburg and Munson, “where the
solicitation is combined with the advocacy and dissemination
of information, the charity reaps a substantial benefit from the
act of solicitation itself.” Riley, 437 U.S. at 798. For some
charities, a substantial aspect of their programmatic purpose is
to broadly communicate a particular message. Amicus
MADD ’s mission, for instance, is to communicate the message
“Don’t Drink and Drive.” For such groups, “a significant
portion of the fundraiser’s ‘fee’ may well go toward achieving
the charity’s objectives even though it is not remitted to the
charity in cash.” Jd. at 798-99 (citations omitted); e.g., Gary
Ellis, Making a Connection: DialAmerica Helps Raise
Awareness and Funds for MADD’s Mission, DRIVEN
Magazine, at 23 (Fall 2002) (DialAmerica telemarketers “reach
millions of people a year, and each call educates the public
about the tragedy of drunk driving, provides statistics and asks
the customer to always designate a sober driver’’), available at
http://www.madd.org/news/0, 1056,5616,00.html.

Here Illinois has ignored the First Amendment value
inherent in the solicitations the professional fundraisers
conducted on VietNow’s behalf, attaching significance only to
the 85 percent figure in the contract without regard to how that
fee was spent and whether a portion of the fee was used for
programmatic purposes. As Judge Posner explained in
rejecting the IRS’s revocation of the tax exemption of a charity
that paid its professional fundraiser $26-plus million of the
$28-plus million in charitable funds it had raised: “These
figures are deceptive, because UCC got a charitable ‘bang’
from the mailings themselves, which contained educational
materials . . . in direct support of the charity’s central charitable
goal. A charity whose entire goal was to publish educational
materials would spend all or most of its revenues on
publishing, but this would be in support rather than in
derogation of its charitable purposes.” United Cancer Council

14

v. Commissioner, 165 F.3d 1173, 1178 (7th Cir. 1999).
Moreover, it is wrong for Illinois to suggest, absent an actual
diversion of charitable funds or violation of the terms of the
fundraising contracts, that the professional fundraisers in this
or similar instances “kept” for themselves a certain percentage
of charitable collections—as if to imply that the fee represents
pure profit. Henry C. Suhrke, What Can Be Done About Fund
Raising ‘‘Fraud"’?, XXV1 Philanthropy Monthly, July/Aug.
1993, at 11; see, e.g., State Br. 2, 3, 9, 45. Fundraising,
especially telemarketing, is expensive, often requiring the
outlay of hundreds of thousands of dollars to buy telephone
equipment, hire solicitors to make calls, pay phone bills, send
out follow-up mail to donors, and handle donation checks.
Lipman, XIII Chron. of Philanthropy, supra, at 24, 27.
Second, the Riley Court noted that an unchallenged portion
of North Carolina’s disclosure law required professional
fundraisers to disclose their professional status to potential
donors, “thereby giving notice that at least a portion of the
money contributed will be retained.” Riley, 487 U.S. at 799 &
n.11. The Court also recognized that donors are “undoubtedly
aware that solicitations incur costs, to which part of their
donation might apply.” Jd. at 799. Illinois likewise requires
that professional fundraisers inform prospective donors that the
solicitation is being made “by a paid professional fund raiser”
and “that contracts and reports regarding the charity are on file
with the Illinois Attorney General.” See 225 Ill. Comp. Stat.
460/17(a). There is no reason that these disclosure
requirements are insufficient to put potential donors on notice
that part of their donation will be used to defray the solicitor’s
expenses.* Although both Illinois and the United States assert

* Amici do not object to Illinois’s requirement that fundraisers disclose
their paid professional status. Such a “brief, bland, and non-pejorative
disclosure” is unobjectionable because, unlike a fundraising percentage
disclosure requirement, it is “unlikely to discourage donations.” Telco
Communications, Inc. v. Carbaugh, 885 F.2d 1225, 1232 (4th Cir. 1989);
see also Indiana Voluntary Firemen’s Ass'n v. Pearson, 700 F. Supp. 421,

ee SR

15

that the amended complaint alleges that the fundraisers failed
to disclose their paid professional status here, see State Br. 4;
U.S. Br. 16, the complaint in fact makes no such claim, see
4 37 (J.A. 10): nor, unsurprisingly, did the Illinois courts
understand the Attorney General to assert such a claim.
Under the State’s theory, then, a general solicitation that
describes the charitable purposes to which funds will be used
is “misleading” not because the solicitor has falsely implied a
verifiable fact, but rather because the Attorney General has
made a subjective judgment that the fundraiser’s fee is “higher”
than a donor might have expected. As the Riley Court pointed
out, however, a donor is always “free to inquire how much of
the contribution will be turned over to the charity.” In fact, the
Court emphasized, North Carolina law (like the Illinois statute,
225 Ill. Comp. Stat. 460/17(b)) required the disclosure of such
information upon request by the donor. 487 U.S. at 799; see,
e.g., Famine Relief Fund v. West Virginia, 905 F.2d 747, 751-
52 (4th Cir. 1990) (sustaining disclosure-upon-request
requirement). Even without such a requirement, the potential
donor who is refused an answer is not likely to donate. Riley,
487 U.S. at 799. Such disclosure-on-demand statutes are far
less objectionable because specific requests for information
from potential coriributors provide a context for the solicitor
(or in-house staff or volunteer) to make fundraising expense
information understandable to a listener who presumably
(because she asked the question) is willing to attend to the
answer. Cf. Ibanez v. Florida Dep't of Bus. & Prof'l Regn,
512 U.S. 136, 145 n.9 (1994) (attorney advertisement of
credentials not misleading in part because consumers could call
the board to verify the credentials and state bar rules required
the provision of written information describing the attorney’s
expertise “to anyone who so inquires”). The State has not
alleged that the professional fundraisers refused to answer
candidly such informational requests here.
Finally, the Court in Riley rejected the fundraising

441-42 (S.D. Ind. 1988).

16

percentage disclosure requirement for the simple reason that it
“will almost certainly hamper the legitimate efforts of
professional fundraisers to raise money for the charities they
represent.” 487 U.S. at 799. Not only would such a
requirement discriminate against new, expanding, or unpopular
charities that rely on professional fundraisers and conduct
costly campaigns, but “in the context of a verbal solicitation, if
the potential donor is unhappy with the disclosed percentage,
the fundraiser will not likely be given a chance to explain the
figure; the disclosure will be the last words spoken as the donor
closes the door or hangs up the phone.” /d. at 799-800. In
short, the Court concluded: “The First Amendment mandates
that we presume that speakers, not the government, know best
both what they want to say and how to say it.” /d. at 790-91.

A charitable solicitation, particularly by telephone, is
made in a brief exchange with a prospective donor. A premium
is placed on the solicitor’s ability to convey effectively and
persuasively the importance of the charity’s mission and the
need for that potential donor’s involvement and financial
support, and to put to rest any reservations regarding the track
record of the organization or the popularity of its cause. In
short, it is a delicate and fleeting exchange. Similar concerns
arise for direct mail, as that mail competes with every other
piece of mail for the recipient’s limited attention. Any
government-compelled disclosure, other than the most basic
facts regarding the identity of the charity, the nature of its
mission, and, in the case of telemarketing, the status of the
caller, threatens the success of that exchange, hampering
charities’ protected speech and chilling the free flow of
information in the future. See Texas Siate Troopers Ass'n v.
Morales, 10 F. Supp. 2d 628, 634-35 (N.D. Tex. 1998).
(“[T]elephone solicitors have a limited and time sensitive
window of opportunity during which to communicate their
message. Mandating that the solicitors disclose [percentage]
information at the beginning of the phone call would certainly
inhibit the solicitors’ ability to effectively seek contributions
and, consequently, would impede the solicitation.”’).

17

2. Although the Riley Court reaffirmed that a State
“may vigorously enforce its antifraud laws to prohibit
professional fundraisers from obtaining money on false
pretenses or by making false statements,” 487 U.S. at 800; see
also Munson, 467 U.S. at 961 n.9; Schaumburg, 444 U.S. at
636-37, the Court plainly did not mean to imply that regulators
could bring fraud actions against fundraisers or charities for
failing to make a disclosure that the Court had just explained
was not required to render a solicitation non-misleading. See
Riley, 487 U.S. at 798-801. Indeed, the Court clarified that it
would “not immunize a law requiring a speaker favoring a
particular government project to state at the outset of every
address the average cost overruns in similar projects, or a law
requiring a speaker favoring an incumbent candidate to state
during every solicitation that candidate’s travel budget.”
Although “the foregoing factual information might be relevant
to the listener, and in the latter case, could encourage or
discourage the listener from making a political donation,” a
law compelling its disclosure would “clearly and substantially
burden the protected speech.” /d. at 798 (emphasis added).

A fundraiser’s failure to disclose a fundraising cost
percentage in a particular case where a state attorney general
has deemed the cost especially high is no different from these
other types of potentially discouraging disclosures that the
Riley Court denied the states the power to compel. Such
compulsion would impose an even more significant burden on
protected speech here because, as explained above, fundraising
cost percentages have no independent informational
significance, and there is no readily ascertainable or verifiable
“fact” to disclose. Charities and fundraisers alike would be left
wondering which disclosures they must make up front to
prospective donors to avoid the risk of a fraud action by state
regulators afterward. The specter of such enforcement action
whenever a charity or fundraiser has failed to disclose
fundraising costs that a state deems to be “excessive,”
“blankets with uncertainty whatever may be said,” compelling
“the speaker to hedge and trim” its speech. Thomas v. Collins,

a —_—EEn nea

18

323 U.S. 516, 535 (1945). The only other choice is for a
charity or fundraiser to make elaborate, distracting, and
potentially unappealing fundraising cost revelations in all
communications with potential donors to avoid the possibility
of losing the right to speak at all. Either course of action is
sure to inhibit charities’ efforts to build public support for their
missions.°

C. Imposing Such a Requirement After the Fact on
a Case-by-Case Basis Presents an Even Greater
Risk to Charities’ Protected Speech Than a
Prophylactic Disclosure Requirement.

The State contends, however, that the
Schaumburg/Munson/Riley trilogy is irrelevant to its ability to
bring an individual fraud action in this case because I]linois has
attempted neither to regulate the size of the professional
fundraisers’ fee nor to mandate any particular point-of-
solicitation disclosure that must be made in all cases. Instead,
it argues, a case-by-case approach is less intrusive because it
permits the State to evaluate in retrospect whether a fraud on
potential donors has occurred and to tailor its regulatory
approach to the particular facts. State Br. 12, 23-24, 48. -The
Illinois Supreme Court was right to reject this disingenuous
effort to distinguish Riley and its predecessors. 763 N.E.2d at
297. To be sure, a failure to disclose can constitute fraud in
some situations, but what is particularly striking about the
State’s lengthy discussion of fraud principles here is that it fails
to cite even a single fraud case in which the facts remotely
resemble these, let alone one where fully protected speech was

* This does not mean, however, that fundraising cost information should be
“categorically” barred as evidence in a fraud case brought against a charity
or a fundraiser or that fundraising costs are “irrelevant” to a fraud action
based on other indicia of fraud, as the State claims the Illinois Supreme
Court ruled. See State Br. i, 11, 43, 44. The court below simply held that
a fraud action may not be predicated on nothing more than a solicitor's
failure to divulge fundraising costs at the point of solicitation.

19 -

at issue. The blunt hammer of a fraud action for failure to
disclose fundraising fees when they are higher than some real
or hypothesized individual might expect is no more “narrowly
tailored” or able to survive “exacting First Amendment
scrutiny,” Riley, 487 U.S. at 789, than a disclosure requirement
that applies to all solicitations.

1. Asan initial matter, it is important to dispel the myth
that Riley is inapposite because the State does not propose to
compel any particular disclosures up front, but merely wishes
the option of prosecuting false or misleading statements after
they are made. State Br. 46; U.S. Br. 9, 24. There is nothing
about the alleged exchanges between the fundraisers here and
potential donors that takes them outside of the prototypical
exchange contemplated by this Court in Riley, in which a
professional fundraiser identifies the charitable purposes for
which funds are solicited, but does not volunteer the proportion
that will go toward paying the fundraiser’s fee (of which a
substantial portion is expended to fulfill the fundraiser’s
obligations to the charity). While amici do not dispute the
authority of state and federal regulators aggressively to pursue
actual fraud committed by fundraisers or charities, the use of
suggestive or inflammatory terms such as “deception,” “half
truths,” “deceit for pecuniary gain,” and “ingenious swindlers,”
State Br. 9, 11, 29, 39, cannot convert this case into something
other than what it is: a fraud action premised on the
fundraisers’ failure to disclose voluntarily to potential donors
the terms of their contract with VietNow.

Far from a saving grace, the State’s claimed discretion to
decide, without notice or fair warning, when to bring a fraud
action for failure to make a disclosure that this Court
previously held the states could not compel, renders this type
of enforcement activity far worse, from the standpoint of
safeguarding First Amendment freedoms, than the categorical
disclosure requirement struck down in Riley. The discretion
Illinois seeks to exercise here is no different, in effect, from the
“waiver” provision this Court rejected in Munson. The
Maryland law invalidated in that case prohibited charities from

20

paying or agreeing to pay more than 25 percent of the amount
raised, but provided for an administrative waiver for a charity
that could demonstrate financial necessity. The Court ruled
that this added flexibility did not save the statute because
Maryland’s waiver authority was tantamount to a “license” for
the dissemination of ideas and hence “inherently suspect.” 467
U.S. at 964 n.12; of Shuttlesworth v. City of Birmingham, 394
U.S. 147, 150-51 (1969) (“[A] law subjecting the exercise of
First Amendment freedoms to the prior restraint of a license,
without narrow, objective, and definite standards to guide the
licensing authority, is unconstitutional.”). As the Court aptly
concluded, charities whose First Amendment nights are
abridged by the fundraising limitation “simply would have
traded a direct prohibition on their activity for a licensing
scheme that, if it is available to them at all, is available only at
the unguided discretion of the Secretary of State.” 967 U.S. at
964 n.12; see also Riley, 487 U.S. at 793-94; Schaumburg, 444
U.S. at 643 n.1 (Rehnquist, J., dissenting).

As the court below recognized, Illinois’s fraud action is no
“less intrusive” because it is an instance of individual litigation.
763 N.E.2d at 297. The post-solicitation approach invites
significantly more self-censorship because all fundraisers in the
State “would have the burden of defending the reasonableness
of their fees, on a case-by-case basis, whenever in the Attorney
General’s judgment the public was being deceived about the
charitable nature of a fund-raising campaign because the fund-
raiser’s fee was too high.” Jd. at 299. As a result, fundraisers
(and charities, as well) “would be at constant risk of incurring
litigation costs, as well as civil and criminal penalties, which
could produce a substantial chilling effect on protected speech,
based on nothing more than a ‘loose inference that the fee
might be too high.”” Jd. (quoting Riley, 487 U.S. at 793). And
although Illinois disclaims any intent to regulate the size of the
fees charged by fundraisers, see State Br. 11, 24 n.21, 41, a
fundraiser’s obligation to divulge its fee would be triggered
only when that fee was higher than a donor might expect, a
determination to be made at the discretion of state officials who

21

might be serving their own political interests in making such a
determination. The State’s fraud action, then, would have the
effect either of capping fundraising costs at whatever level
regulators decided was excessive, or driving fundraisers out of
a jurisdiction altogether to avoid making undesirable and even
misleading disclosures to potential contributors.

2. Further compounding the burden placed on charities
and fundraisers from fraud actions pursued on an “ad hoc and
subjective basis” by state regulators, Grayned v. City of
Rockford, 408 U.S. 104, 109 (1972), is the intractable difficulty
that charities would face in being denied “fair warning as to
what is prohibited.” /d. at 114. “All are entitled to be
informed as to what the State commands or forbids.” Lanzetta
v. New Jersey, 306 U.S. 451, 453 (1939). Still “stricter
standards of permissible statutory vagueness may be applied to
a statute having a potentially inhibiting effect on speech.”
Smith v. California, 361 U.S. 147, 151 (1959); accord Baggett
v. Bullitt, 377 U.S. 360, 372 & n.10 (1964). “Because First
Amendment freedoms need breathing space to survive,
government may regulate in the area only with narrow
specificity.” Button, 371 U.S. at 433. Such specificity is
completely lacking here: If this fraud action is permitted to
proceed, charities and fundraisers will be left to guess which
representations they may make without risk and which
disclosures they must make to avoid criminal penalties, loss of
charitable solicitation licenses, and other sanctions.

Conceding that charities and fundraisers must be provided
“fair notice” of what is proscribed before the State may bring
an action for fraud against them, State Br. 28, the State finds
that requirement satisfied here because there is a well-
developed law of misrepresentation, State Br. 28-30— in other
words, solicitors are on notice of their obligation not to commit
fraud. Yet there is no “authoritative judicial construction,”
State Br. 28, of the principles of implied misrepresentation that
would suggest that this kind of case is susceptible to a fraud

22

claim.’ The real-life scenarios in which charities and
fundraisers would be left to speculate, at their peril, about their
legal obligations are legion:

* Suppose a charity agreed to pay a professional fundraiser
85% of funds received for a risky and expensive
telemarketing campaign aimed at increasing the charity’s
donor base, but, over a several-year period, the charity
devoted more than 50% of its overall contributions to its
charitable services. Would it be misleading in that
instance for the charity or fundraiser to fail to disclose the
85% contract to potential donors?

¢ Suppose a charity spent 85% of funds received from a
particular campaign on fundraising costs, but all
fundraising was conducted entirely in-house. If the
charity’s staff described its charitable purposes in its
solicitations, but did not disclose its fundraising expenses
to potential donors, would the charity be guilty of fraud?

¢ Imagine the converse situation, in which a fundraising
contract provided that the charity would receive more than
half of the gross proceeds in a particular fundraising drive,

~ but overall the charity spent only 15% of funds received
on its charitable purposes. Would the charity or fundraiser
have to disclose the charity’s overall fundraising costs to
donors solicited in that fundraising drive?

¢ What is the relevant time-frame for determining whether
a solicitation left a false impression regarding how funds

* The lower courts’ treatment of state statutes that expressly stated the
principle upon which Illinois relies here—that at a specified fundraising
percentage level, it is a misrepresentation of fact for a solicitor to represent
to potential donors that funds will go to charitable purposes without
courts struck the statutes down. See, e.g., Texas State Troopers, \0 F. Supp.
2d 628; Kentucky State Police Professional Ass'n v. Gorman, $70 F. Supp.
166 (E.D. Ky. 1994); People v. French, 762 P.2d 1369 (Colo. 1988) (en
banc); State v. Events Int'l, Inc., 528 A.2d 458 (Me. 1987).

23

would be used? Should regulators focus on the alleged
misrepresentations or omissions made regarding the
fundraising costs involved in a particular campaign or
under a specific contract, or, instead, should they focus on
the charity’s overall allocation of funds between
fundraising and charitable expenses?

* Many of the amici enter into fundraising contracts, such as
fee-for-service agreements, that do not specify a
percentage payment to the fundraiser or return to the
charity. Will a charity or its fundraiser be held
accountable after the fact by state or local regulators, who
can review the charities’ IRS Form 990s, if it turns out fhat
a particular campaign—or, indeed, their fundraising effort
for the entire year—has been a financial failure, yielding
little to no return to the charity?

All charities incur high fundraising costs at some point.
The State offers no objective standard to govern when a charity
must qualify its description of its program services or reveal
fundraising costs to potential donors to avert a potential fraud
action. Under the State’s approach, virtually any statement a
solicitor might make in a solicitation could be viewed as
potentially misleading if not accompanied by a disclosure of
fundraising costs.

Without “explicit standards” governing when a fraud
action may be brought based on an omission of fundraising
cost information in a solicitation, it is left to the whim of the
state or local regulator to determine whether to target particular
charities or fundraisers for political or public relations gains or
to discriminate against those groups that have taken positions
in Opposition to regulators in a particular state. The very threat
of such selective enforcement raises serious First Amendment
concems. See, e.g., Gentile v. State Bar of Nevada, 501 U.S.
1030, 1051 (1991) (invalidating attorney disciplinary rule that
was “so imprecise that discriminatory enforcement [was] a real
possibility”); Papachristou v. City of Jacksonville, 405 U.S.
156, 170 (1972) (standardless local vagrancy ordinance

24

furnished “a convenient tool for ‘harsh and discriminatory
enforcement by local prosecuting officials, against particular
groups deemed to merit their displeasure”) (quoting Thornhill
v. Alabama, 310 U.S. 88, 97-98 (1940)); see also City of
Houston v. Hill, 482 U.S. 451, 465 & n.15 (1987); Kolender v.
Lawson, 461 U.S. 352, 357-61 (1983); Hynes v. Mayor of
Oradell, 425 U.S. 610, 622 (1976).

The conclusion is inescapable that the “substantial
imprecisions” of applying a common-law theory of fraud to the
failure to reveal fundraising cost. information to potential
donors “will chill speech.” Hill v. Colorado, 530 U.S. 703, 772
(2000) (Kennedy, J., dissenting); Button, 371 U.S. at 438
(“Precision of regulation must be the touchstone in an area so
closely touching our most precious freedoms.”). The end
result, if Illinois prevails, will be to inhibit charitable
solicitations and reduce the total quantity of protected speech.
See Schaumburg, 444 U.S. at 632 (without solicitation, “the
flow of... information and advocacy would likely cease’),
Meyer v. Grant, 486 U.S. 414, 423 (1988) (prohibition against
use of paid petition circulators had “the inevitable effect of
reducing the total quantum of speech on a public issue”’).

Il. FACILITATING PUBLIC ACCESS TO
INFORMATION REGARDING CHARITIES,
COUPLED WITH EXISTING ENFORCEMENT
REMEDIES, PROVIDES MORE EFFECTIVE AND
CONSTITUTIONAL MEANS OF ADDRESSING
ABUSIVE CHARITABLE SOLICITATIONS.

A. The State argues that donors have little opportunity
to learn how their contributions will be used, see State Br. 10-
11, 36, and that, therefore, states must protect consumers from
rapacious fundraisers by compelling, in certain instances,
affirmative disclosures to donors regarding fundraising costs.
If that were ever true, the notion is antiquated today, given the
extensive financial information regarding charities and
professional fundraisers that is reported to, made accessible to
the public by, and frequently published by the states.

25

Extensive information regarding charities is widely
disseminated, usually at no charge on the Internet, by the
states, charity watchdog groups, charities themselves, and
others.

This Court has invited the states to require charities and
fundraisers to submit financial information as part of their state
filings and to publish that information to educate the public.
See, e.g., Riley, 487 U.S. at 795, 800; Schaumburg, 444 U.S. at
637-38. Many lower courts have followed that lead, rejecting
regulations of charitable solicitations—many of them
compelled point-of-solicitation disclosures—because state
publication of the same information would be at least as
effective without offending the First Amendment. See, e.g.,
Texas State Troopers, 10 F. Supp. 2d at 634; National Fed'n of
the Blind of Colorado v. Norton, 981 F. Swpp. 1371, 1374 (D.
Colo. 1997); Gorman, 870 F. Supp. at 169; Pearson, 700 F.
Supp. at 443-44.

The states have accepted the courts’ invitation. Forty of
them, including Illinois, and the District of Columbia (in
addition to many local governments) have adopted charitable
solicitation acts that require charities and fundraisers soliciting
contributions in their jurisdictions to register and submit
financial information. See, e.g., 225 Ill. Comp. Stat. 460/2,
460/4 (registration and annual reporting requirements for
charities); id 460/6, 460/6.5, 460/8 (registration, annual
reporting requirements, and contract requirements for
professional fundraisers). Charities~ and professional
fundraisers alike are required to file copies of their fundraising
contracts with the Illinois Attorney General. Jd. 460/2(a)(10);
id. 460/7(a). All of this extensive information is open to public
inspection, id. 460/2(f), and the Attorney General is authorized
to publish an annual report on charities, including the amount
of money and percentage of collections spent on program
services. Jd. 460/9(i); see http://www.ag.state.il.us/charitable/

26

charitydb.html (future Illinois charity database).’ States,
including Illinois, often publish guides for the general public
on charitable giving. E.g., Tips for Informed Charitable
Giving, available at http://www.ag.state.il.us/charitable/
charitygive.htm. In addition, the Internal Revenue Code
requires nonprofits to provide copies of their annual tax filings,
the IRS Form 990s, to the public upon request. 26 U.S.C.
§ 6104(d). Charities often post these forms on their websites,
see, €.g., http://www.citizen.org/abouv/articles.cfm?ID=5 165
(amicus Public Citizen’s Form 990s), along with other
information about their missions and accomplishments.

In addition to information made publicly available by the
states and charities themselves, considerable information
regarding charities is disseminated by third parties. GuideStar,
a national database of nonprofit organizations, provides
information on 850,000 nonprofits nationwide, including their
IRS Form 990s. See www.guidestar.org. Numerous charity
watchdog groups provide fundraising percentage information
or prepare reports evaluating or rating charities according to
varied criteria.* The trade press provides similar information.
See, e.g., Lipman, XIII Chron. of Philanthropy, supra (analysis
of nonprofit groups and professional fundraising fees).
Offering such information to the donating public through

? Numerous states publish sch information. See, eg.,
http://justice.hdcdojnet.state.ca.us/charitysr/default.asp (California charities
database search); Florida Gift Givers’ Guide: A Guide to Charitable Giving
in Florida (2002-2003), available « http://www.800helpfla.com/~cs/
gift_givers/search.html; New York State Department of Law, Charities
Bureau, Pennies for Charity: Where Your Money Goes (Dec. 2002),
available at http://www.oag.state.ny.us/charities/pennies02/penintro. html;
http://www.secstate.wa.gov/ charities/search.aspx (Washington database for
charities and commercial fundraisers).

* See, e.g., Better Business Bureau Wise Giving Alliance (www.give.org/
reports/index.asp); Charity Navigator (www.charitynavigator.org);
American Institute of Philanthropy (www.charitywatch.org); Charitable
Choices (www.charitychoices.com); Minnesota Charity Review Council
(www.crcmn.org); National Crime Prevention Council (www.ncpc.org).

27

multiple channels not only respects First Amendment values,
but is likely to be a more effective means of ensuring that
potential donors have at their fingertips the information that
they believe to be most important in deciding whether to make
a charitable contribution. See Riley, 487 U.S. at 804 (Scalia, J.,
concurring) (“[W]here the dissemination of ideas is concerned,
it is safer to assume that the people are smart enough to get the
information they need than to assume that the government is
wise or impartial enough to make the judgment for them.”).

B. This emphasis on publication of information
regarding charities is not meant to suggest that amici believe
that there is no place for fraud actions or other enforcement
activities by federal or state regulators seeking to shut down
charities or fundraisers engaged in abusive solicitation
practices or to force them to comply with legal obligations.
The enforcement tools available to federal and state regulators
that do not compel speech of the government’s choosing,
however, are already adequate for the task.

As noted above, the great majority of states regulate
charities and fundraisers soliciting in their jurisdictions. The
states have successfully enjoined solicitations by, and have
even dissolved, or revoked the charitable charters of, those
charities that have refused to register or satisfy annual
reporting requirements.’ State regulators likewise have been
unhindered in their efforts to root out real fraud in charitable
appeals, whether that fraud is perpetrated through the improper
diversion of funds for personal benefit or through false
representations (explicit or implicit) made in solicitations
themselves. See, e.g., People v. Knippenberg, 757 N.E.2d 667
(ill. App. Ct. 2001) (affirming fundraiser’s criminal
convictions for theft and for using charitable contributions for
his own personal benefit); People v. Caldwell, 290 N.E.2d 279

® See, e.g., Brattman v. Secretary of the Commonwealth, 658 N.E.2d 159
(1995) (Mass. 1995); People ex rel. Abrams v. Westchester County, 604
N.Y.S.2d 579 (N.Y. App. Div. 1993); Abrams v. New York Found 'n for the
Homeless, Inc., 148 Misc. 2d 791 (N.Y. Sup. Ct. 1990).

28

(Ill. App. Ct. 1972) (affirming conviction of organizer of
charity art auction for unauthorized use of a person’s name to
promote the auction).'° The array of existing criminal and civil
sanctions gives the states considerable leverage over charities
and professional fundraisers to negotiate settlements barring
offending persons from further solicitation activities within
their jurisdictions.'' And states long have possessed the
authority at common law (as well as by statute) to supervise the
administration of assets given for charitable purposes. See
State Br. 39 n.30; e.g., Summers v. Cherokee Children &
Family Servs., Inc., 2002 WL 31126636 (Tenn. Ct. App. 2002)
(upholding dissolution of two nonprofits that had abandoned
their charitable purposes and been used for private gain). This
responsibility includes the legitimate authority to ensure that
charitable assets are not grossly mismanaged or wasted—so
long as the State provides advance notice through statutes,
regulations, or authoritative judicial constructions regarding the
circumstances in which it will intervene to preserve those
assets, revoke a charitable charter, or dissolve the corporation.

Furthermore, the states do not act alone in this endeavor.
The federal government has several enforcement options at its
disposal as well. Federal fraud law applies to charitable
solicitations made through the mail or by telephone. See 18
U.S.C. §§ 1341, 1343; e.g., United States v. Ciccone, 219 F.3d

'© See also People v. Orange County Charitable Servs., 73 Cal. App. 4th
1054 (Cal. Ct. App. 1999); Marcus v. Jewish National Fund, 557 N.Y.S.2d
886 (N.Y. App. Div. 1990); Commonwealth ex rel. Preate v. Pennsylvania
Chiefs of Police Ass'n, 572 A.2d 256 (Pa. Commw. Ct. 1990); Strope v.
Commonwealth, 2000 WL 389452 (Va. Ct. App. 2000).

'' See, e.g., Press Release, Settlement with United Children’s Fund
Permanently Bars Charity From Operating in New York (Apr. 2, 2001),
available at http://www.oag.state.ny.us/press/2001/apr/apr02a_01.html
(misrepresentation of percentage of fundraising actually supporting
charitable purpose); Press Release, Charity Scam Highlights Need for
Scrutiny in Making Donations (Dec. 12, 2000), available at
_ http://www.oag.state.ny.us/press/2000/dec/dec12a_00.html (failure to
forward charitable contributions to the charity).

29 ”

1078 (9th Cir. 2000); United States v. Hawkey, 148 F.3d 920
(8th Cir. 1998). The FTC has successfully obtained injunctive
and monetary relief against telemarketers that have engaged in
deceptive fundraising practices, see, e.g., FTC v. NCH, Inc.,
1995 WL 623260 (D. Nev. 1995), aff'd, 106 F.3d 407 (9th Cir.
1997), authority that Congress has recently expanded. See
USA Patriot Act of 2001, Pub. L. No. 107-56, § 1011 (Oct. 26,
2001); see also 16 C.F.R. 310.3(d) & 310.4(e) (Dec. 2002);
U.S. Br. 1-2. Research has uncovered no case, however, in
which either a state or the federal government has successfully
brought a fraud action against a charity or fundraiser for the
failure to disclose fundraising costs to potential donors because
fundraising costs were higher, or the percentage of funds used
for charitable purposes was lower, than a donor might have
expected, absent a false statement.

Finally, the IRS has considerable oversight authority over
tax-exempt organizations, with both its long-established power
to revoke a charity’s tax exemption and its newer authority,
conferred by Congress in 1996, to impose intermediate
sanctions, in the form of substantial excise taxes, on “excess
benefit transactions.” See 26 U.S.C. § 4958; 26 C.F.R. Parts
53, 301 & 602 (2002) (implementing regulations). To maintain
their tax-exempt status, charities must, among various
requirements, be operated (1) so they do not cause any
inurement of their net earnings to the benefit of private
individuals, primarily insiders, who maintain a special
relationship to the charity, 26 U.S.C. § 501(c)(3) & (c)(4)(B);
26 C.F.R. § 1.501(c)(3)-1(c)(2) (2002); and (2) so they do not
confer any other impermissible private benefit, such as when
the charity is not organized and operated primarily for the
advancement of charitable purposes. 26 C.F.R.
§ 1.501(c)(3)-1(a)(1) (2002). See generally Hopkins, supra, at
272-79; Bruce R. Hopkins & D. Benson Tesdahl, /ntermediate
Sanctions: Curbing Nonprofit Abuse 52-59 (1997).

Thus, charities that pay excessive or otherwise
unreasonable compensation for services, or engage in self-
dealing or related-party transactions that primarily benefit

30

individuals with control over the organization, are at risk of
losing their tax exemptions under either the private inurement
doctrine (if insiders are involved) or the more encompassing
private benefit doctrine. See, e.g., United Cancer Council, 165
F.3d at 1179-80 (remanding for determination whether the
charity was operated exclusively for charitable purposes rather
than for the private benefit of its professional fundraisers).'?
Indeed, compensation for performance of services to
disqualified persons that exceeds the value of the consideration
is the principal focus of IRS’s new authority to tax excess
benefit transactions, which are, in essence, private inurement
transactions. See Hopkins, supra, at 206-14; Hopkins &
Tesdahl, supra, Chapter 4; cf Caracci v. Commissioner, 118
T.C. 379 (2002) (upholding imposition of sanctions on excess
benefit transactions where nonprofit home health care
organizations transferred their assets to for-profit entities for
less than market value).

In sum, if charities fail to comply with state registration
and reporting requirements, engage in charitable solicitations
that actually are fraudulent, enter into fundraising or other
contracts that are not at arms length, engage in self-dealing or
related-party transactions with controlling individuals or
entities without adequate consideration, are grossly
mismanaged, or, for whatever reason, are not operated
exclusively for charitable purposes, both the states and the
federal government have ample authority to respond without
running afoul of the First Amendment.

CONCLUSION

For the foregoing reasons, amici respectfully urge this
Court to affirm the judgment of the Illinois Supreme Court.

'2 See also Church of Scientology of California v. Commissioner, 823 F.2d
1310 (9th Cir. 1987); Church By Mail, Inc. v. Commissioner, 765 F.2d 1387
(9th Cir. 1985); Airlie Found'n, Inc. v. United States, 826 F. Supp. 537
(D.D.C. 1993), aff'd, 55 F.3d 684 (D.C. Cir. 1995) (per curiam); American
Campaign Academy v. Commissioner, 92 T.C. 1053 (1989).

JANUARY 2003

Respectfully submitted,

Bonnie I. Robin-Vergeer
Counsel of Record

Alan B. Morrison

PUBLIC CITIZEN
LITIGATION GROUP

1600 20th Street, N.W.

Washington, D.C. 20009

(202) 588-1000

Counsel for Amici Curiae
Public Citizen, Inc., ef al.

Al

APPENDIX

The foregoing brief is submitted on behalf of the following
176 nonprofit organizations:

American Academy of Family, Leawood, Kansas
American Association of State Troopers, Tallahassee, Florida
American Breast Cancer Foundation, Inc.,
Baltimore, Maryland
American Cell Therapy Research Foundation,
Clarksburg, Maryland
American Charities for Reasonable Fundraising
Regulation, Inc., Arlington, Virginia
American Council of the Blind, Washington, D.C.
American Council of the Blind Enterprises and Services, Inc.,
Minneapolis, Minnesota
American Diabetes Association, Alexandria, Virginia
American Health Assistance Foundation, Clarksburg, Maryland
American Humane Association, Englewood, Colorado
American Institute for Cancer Research, Washington, D.C.
Americas Second Harvest, Chicago, Illinois
Amnesty International of the USA, New York, New York
ARRISE Centers, Inc., Glen Ellyn, Illinois
Associated Fire Fighters of Illinois, Springfield, Illinois
Association of Marian Helpers, Stockbridge, Virginia
Association of the Miraculous Medal, Perrville, Missouri
Blinded Veterans Association, Washington, D.C.
Bread for the World, Washington, D.C.
Cal Farley’s Boys Ranch and Affiliates, Amarillo, Texas
Cancer Care, New York, New York
Cancer Recovery Foundation of America,
Harrisburg, Pennsylvania
Central Pennsylvania Food Bank, Harrisburg, Pennsylvania
Childhelp, Inc., Scottsdale, Arizona
Childhood Leukemia Foundation, Inc., Brick, New Jersey
Children Awaiting Parents, Inc., Rochester, New York
Children International, Kansas City, Missouri
Children’s Hunger Relief Fund, Santa Rosa, California

A2

Children’s Organ Transplant Association,
Bloomington, Indiana
Children’s Wish Foundation International, Atlanta, Georgia
Christian Appalachian Project, Lancaster, Kentucky
Concerned Women for America, Washington, D.C.
Concerns of Police Survivors, Camdenton, Missouri
Council for Government Reform, Arlington, Virginia
Covenant House, New York, New York
Dakota Boys Ranch Association, Minot, North Dakota
Defeat Diabetes Foundation, Inc., Madeira Beach, Florida
Disabled American Veterans, Cincinnati, Ohio
Doris Day Animal League, Washington, D.C.
Ducks Unlimited, Memphis, Tennessee
Eastern Paralyzed Veterans Association,
Jackson Heights, New York
Elderhostel, Inc., Boston, Massachusetts
Endometriosis Association, Milwaukee, Wisconsin
Food For The Poor, Inc., Deerfield Beach, Florida
Food Bank of the Rockies, Denver, Colorado
Food Bank of the Southern Tier, Elmira, New York
Franciscan Friars of the Atonement-Graymoor,
Garrison, New York
Freedom from Hunger, Davis, California
Girls Incorporated, New York, New York
Good Shepherd Food Bank, Auburn, Maine
Guide Dog Foundation for the Blind, Inc.,
Smithtown, New York
Guiding Eyes forthe Blind ,Yorktown Heights, New York
Haggai Institute for Advance Leadership Training, Inc.,
Norcross, Georgia
HALT, Inc.—An Organization of Americans for Legal Reform,
Washington, D.C.
Have A Heart Children’s Cancer Society, Inc.,
Levittown, New York
Help Hospitalized Veterans, Winchester, California
Hemophilia Association of New York, Inc.,
New York, New York

A3

Hospitaller Brothers of St. John of God, Westville, New Jersey
Infact, Boston, Massachusetts
Inner-City Scholarship Fund, Inc., New York, New York
International Association of Fire Fighters, Washington, D.C.
International Fund for Animal Welfare,
Yarmouthport, Massachusetts
lowa Professional Firefighters, West Des Moines, lowa
Israel Children’s Cancer Foundation, Inc.,
New York, New York
Kentucky Special Olympics, Inc., Frankfort, Kentucky
Kids Wish Network, Inc., Oldsmar, Florida
Lifesavers, Inc., Lancaster, California
Little Shelter Animal Adoption Center, Inc.,
Huntington, New York
March of Dimes Birth Defects Foundation,
White Plains, New York
Marine Corps Heritage Foundation, Quantico, Virginia
Mays Mission for the Handicapped, Heber Springs, Arkansas
Messengers of Christ—Lutheran Bible Translators, Inc.,
Aurora, Illinois
Michigan Professional Fire Fighters Union, Trenton, Michigan
Missionary Servants of the Most Holy Trinity dba
Trinity Missions, Silver Spring, Maryland
Missouri State Council of Fire Fighters, Kansas City, Missouri
Moose Charities, Inc., Mooseheart, Illinois
Mothers Against Drunk Driving, Irving, Texas
Multiple Sclerosis Association of America,
Cherry Hill, New Jersey
Multiple Sclerosis Foundation, Fort Lauderdale, Florida
Muscular Dystrophy Family Foundation, Indianapolis, Indiana
National Association for the Terminally III,
Shelbyville, Kentucky
National Children’s Cancer Society, St. Louis, Missouri
National Coalition of Prayer, Inc., Springville, Tennessee
National Committee to Preserve Social Security and Medicare,
Washington, D.C.
National Federation of the Blind, Baltimore, Maryland

A4

National Humane Education Society,
Charles Town, West Virginia
National Law Enforcement Officers Memonal Fund,
Washington, D.C.
National Multiple Sclerosis Society, New York, New York
National Museum of Women in the Arts, Washington, D.C.
National Troopers Coalition, Howell, Michigan
National Trust for Historic Preservation, Washington, D.C.
North Shore Animal League of America,
Port Washington, New York
Notre Dame India Mission, Chardon, Ohio
Ohio Right to Life Society, Inc., Columbus, Ohio
Omega Institute for Holistic Studies, Rhinebeck, New York
Osmond Foundation for the Children of the World
Salt Lake City, Utah
Paralyzed Veterans of America, Washington, D.C.
Pennsylvania Professional Firefighters Association,
Harrisburg, Pennsylvania
People for the American Way, Washington, D.C.
Plan International - USA, Warwick, Rhode Island
Priests of the Sacred Heart, Hales Corners, Wisconsin
Professional Firefighters of Utah, Farmington, Utah
Professional Firefighters of Wisconsin, Inc.,
Waukesha, Wisconsin
Project on Government Oversight, Washington, D.C.
ProLiteracy Worldwide, Syracuse, New York
Public Citizen, Inc., Washington, D.C.
Public Citizen Foundation, Inc., Washington, D.C.
Reach Our Children, St. Louis, Missouri
Sacred Heart League, Walls, Mississippi
Salesian Missions, New Rochelle, New York
Save A Child Foundation, Flint, Montana
Second Harvest Foodbank of Eastern Tennessee,
Knoxville, Tennessee
Shiloh International Ministries, Inc., La Verne, California
Southern Poverty Law Center, Montgomery, Alabama
Special Olympics, Inc., Washington, D.C.

a a

AS

Special Olympics Alabama, Inc., Montgomery, Alabama
Special Olympics Arizona, Inc., Phoenix, Arizona
Special Olympics Arkansas, Inc., North Little Rock, Arkansas
Special Olympics Colorado, Inc., Denver, Colorado
Special Olympics Connecticut, Inc., Hamden, Connecticut
Special Olympics Delaware, Inc., Newark, Delaware
Special Olympics District of Columbia, Inc., Washington, D.C.
Special Olympics Florida, Inc., Clermont, Florida
Special Olympics Georgia, Inc., Atlanta, Georgia
Special Olympics Hawaii, Inc., Honolulu, Hawaii
Special Olympics Illinois, Inc., Normal, Illinois
Special Olympics Indiana, Inc., Indianapolis, Indiana
Special Olympics Iowa, Inc., West Des Moines, Iowa
Special Olympics Kansas, Inc., Mission, Kansas
Special Olympics Louisiana, Inc., Hammond, Louisiana
Special Olympics Maine, Inc., South Portland, Maine
Special Olympics Maryland, Inc., Columbia, Maryland
Special Olympics Massachusetts, Inc.,

Hathorne, Massachusetts
Special Olympics Michigan, Inc., Mount Pleasant, Michigan
Special Olympics Minnesota, Inc., Minneapolis, Minnesota
Special Olympics Missouri, Inc., Jefferson City, Missouri
Special Olympics Montana, Inc., Great Falls, Montana
Special Olympics Nebraska, Inc., Omaha, Nebraska
Special Olympics Nevada, Inc., Las Vegas, Nevada
Special Olympics New Hampshire, Inc.,

Manchester, New Hampshire
Special Olympics New Mexico, Inc.,

Albuquerque, New Mexico
Special Olympics North Dakota, Inc.,

Grand Forks, North Dakota
Special Olympics Northern California, Inc.,

Pleasant Hills, California
Special Olympics Ohio, Inc., Columbus, Ohio
Special Olympics Oklahoma, Tulsa, Oklahoma
Special Olympics Pennsylvania, Inc.,

Norristown, Pennsylvania

A6

Special Olympics Rhode Island, Inc., Warwick, Rhode Island
Special Olympics South Carolina, Inc.,
Columbia, South Carolina
Special Olympics South Dakota, Inc.,
Sioux Falls, South Dakota
Special Olympics Southern California, Inc.,
Culver City, California
Special Olympics Tennessee, Inc., Nashville, Tennessee
Special Olympics Texas, Inc., Austin, Texas
Special Olympics Virginia, Inc., Richmond, Virginia
Special Olympics Washington, Inc., Seattle, Washington
Special Olympics West Virginia, Inc.,
Charleston, West Virginia
Special Olympics Wisconsin, Inc., Madison, Wisconsin
St. Anthony’s Guild, New York, New York
St. Elizabeth Mission Society, Inc., Allegany, New York
St. Francis Missions, St. Francis, South Dakota
St. Joseph’s Indian School, Chamberlain, South Dakota
Support Our Aging Religious!, Silver Spring, Maryland
The Arc of the United States, Silver Spring, Maryland
The Center for Food Safety, Washington, D.C.
The Committee for Missing Children, Lawrenceville, Georgia
The Magic Foundation, Oak Park, Illinois
The National Center for Public Policy Research,
Washington, D.C.
The Patagonia Land Trust, Mill Valley, California
The V Foundation, Cary, North Carolina
United States Sportsmen’s Alliance Foundation,
Columbus, Ohio
Utah Special Olympics, Inc., Salt Lake City, Utah
Vermont Public Television, Colchester, Vermont
Vermont Special Olympics, Inc., Williston, Vermont
Veterans Charitable Foundation, Inc., Boynton Beach, Florida
Vietnam Veterans Memorial Fund, Washington, D.C.
Wheat Ridge Ministries, Itasca, Illinois
World Emergency Relief, Carlsbad, California

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0568%3A22. Public record. Not legal advice.