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February 14, 2011
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/span>
Amendments
to Michigan the Charitable Organizations and Solicitations Act<=
/span>
By:
Deanna M. Deldin
On December 22, 2010, former Governor Granholm approved amendments to The Charita=
ble
Organizations and Solicitations Act, 1975 PA 169, MCL § 400.271 <=
i>et
seq (the "Act"), which =
will
go into effect March 30, 2011. The Act regulates charitable
organizations, professional fund raisers and other persons solici=
ting
or accepting contributions on behalf of charitable
organizations. A charitable organization is defined in the =
Act
as a benevolent, educational, philanthropic, human, patriotic, or
eleemosynary organization of persons that solicits or obtains con=
tributions
solicited from the public for charitable purposes.
The current Act requires charitable organizations to
file an application for a license with the Michigan attorney gene=
ral
if it solicits or intends to solicit or receives or intends to re=
ceive
contributions from the public, subject to certain exemptions.&nbs=
p;
Although not a significant change, the revised Act requires a
charitable organization to "register with", rather than
obtain a license from, the attorney general, and clarifies that
registration should occur prior to solicitation.
The most notable change to the Act is an increase in=
the
threshold amount of contributions received by a charitable
organizations which triggers registration. Under the current
Act, a charitable organization that does not intend to solicit and
does not actually receive contributions in excess of $8,000 during
any 12-month period, and whose fundraising activities are conduct=
ed
by volunteers, is exempt from licensing/registration. As
amended, the Act increases the threshold to $25,000.
Other changes include:
1. &nb=
sp;
Authorizing the attorney general to suspend or revoke
the license of a professional fundraiser or the registration of a
charitable organization for violations of the Act.
2. &nb=
sp;
Expressly prohibiting a number of activities involvi=
ng
misrepresentations, false representations and improper use of
contributions.
3. &nb=
sp;
Increasing the fine for a misdemeanor from $500 to
$5,000.
4. &nb=
sp;
Making certain violations of the Act a felony and
subject to punishment of imprisonment up to five years, a maximum
fine of $20,000, or both, for each violation.
5. &nb=
sp;
Authorizing the attorney general to bring a civil ac=
tion
for damages or equitable relief for violations of the Act. =
In
addition, a court may impose a civil fine payable to the State of
Michigan in an amount up to $10,000 for each violation.
6. &nb=
sp;
Authorizing county prosecutors to prosecute persons =
in
violation of the Act in the same manner as the attorney general.<=
/span>
7. &nb=
sp;
Authorizing the attorney general to issue a
cease-and-desist order for a violation of the Act and to require =
an
assurance of discontinuance of the violation. Such assurance
may include payment for the costs of investigation, restitution t=
o an
aggrieved person, or payment to another person.
For further information regarding the Charitable
Organizations and Solicitations Act, including any exemptions whi=
ch
may apply, you may contact Deanna M. Deldin (ddeldin@clarkhill.com,&=
nbsp;313-967-4074)
or any of the attorneys in Clark Hill's Tax Exempt Organizations =
law
group.
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