NOTE: This text was converted to HTML/Web format from a copy of the electronic file used to print the official document that was submitted to the court. This text was not derived from the official printed document itself, and may not be considered a legal copy of the official document. Although the text itself is believed to be nearly identical to that of the originating electronic file (the Table of Authorities was omitted), the nature of HTML format makes the exact layout of the text on the page somewhat unpredictable. As a result, this text will not exactly duplicate the appearance of the official printed document, and page numbers in particular should be discounted.

MIKE HATCH
Attorney General
State of Minnesota

ROBERTA J. CORDANO
Assistant Attorney General
445 Minnesota Street, Suite 1200
St. Paul, Minnesota 55101-2130
(651) 296-1716 (Voice)

ATTORNEYS FOR AMICI CURIAE

* Additional amici are listed on the following page.

Additional amici:

Arkansas Attorney General Mark Pryor
California Attorney General Bill Lockyer
Florida, Pinellas County Attorney Susan H. Churuti
Hawaii Office of Consumer Protection, Jo Ann M. Uchida
Illinois Attorney General James E. Ryan
Indiana Attorney General Jeffrey A. Modisett
Kentucky Attorney General Albert B. (Ben) Chandler
Massachusetts Attorney General Scott Harshbarger
Maine Attorney General Andrew Ketterer
Maryland Attorney General J. Joseph Curran, Jr.
Michigan Attorney General Jennifer M. Granholm
Mississippi Secretary of State Eric Clark
New Hampshire Attorney General Philip T. McLaughlin
New Jersey Attorney General Peter Verniero
New Mexico Attorney General Patricia A. Madrid
New York Attorney General Eliot Spitzer
North Carolina Attorney General Michael F. Easley
North Dakota Attorney General Heidi Heitkamp
Ohio Attorney General Betty D. Montgomery
Oklahoma Attorney General W.A. Drew Edmondson
Oregon Attorney General Hardy Myers
Pennsylvania Attorney General Mike Fisher
Vermont Attorney General William H. Sorrell
Virginia Attorney General Mark L. Earley
Washington Attorney General Christine O. Gregoire
West Virginia Attorney General Darrell V. McGraw, Jr.

TABLE OF CONTENTS

TABLE OF AUTHORITIES

BRIEF OF AMICI CURIAE

INTEREST OF AMICI

ARGUMENT

I. Professional Fund-Raisers And Fund-Raising Counsel Play A Significant Role In The Large And Growing Charitable Solicitation Industry.

II. State Oversight Of Professional Fund-Raisers And Fund-Raising Counsel Is Essential For Public Accountability.

III. Courts Have Repeatedly Upheld Professional Fund-Raiser Registration Statutes.

CONCLUSION

APPENDIX

BRIEF OF AMICI CURIAE

This Brief of Amici Curiae in support of appellee Francine A. Giani, Director of the Division of Consumer Protection, Department of Commerce, for the State of Utah, is submitted with all parties' consent by 24 state Attorneys General, one state Secretary of State, an Office of Consumer Protection, and a County Attorney.

INTEREST OF AMICI

The amici are public officials of state and local government agencies responsible for oversight of charitable organizations and/or professional fund-raisers, professional solicitors, professional fund-raising counsel (consultants) and commercial fund-raisers (hereinafter referred to collectively as “professional fund-raisers”).¹ The amici oversee professional fund-raisers to hold them publicly accountable and to assure that financial information is made public so donors (actual and potential) can make informed choices on how to spend their charitable dollars. Registration is a tool used by law enforcement officials in investigating fraudulent, misleading or deceptive solicitation activities by professional fund-raisers and charities.

As representatives of the public, the amici have a strong interest in this litigation. It is important to the public that professional fund-raisers not be shielded from financial scrutiny by the public and public officials and that donors have information made possible by the registration process. As public officials bearing responsibility to oversee the fast-growing charitable solicitation industry, amici have a special interest in ensuring that donors and law enforcement agencies have access to information about how charitable dollars are spent by charitable organizations and professional fund-raisers. The amici are firmly convinced that Utah's registration scheme for professional fund-raisers properly furthers the constitutionally permissible goal of providing information to Utah donors about the activities of charities and fund-raisers in Utah. The relief sought by appellants would threaten other states' ability to make that information available to the public. This brief underscores the importance of the issues before the Court.

ARGUMENT

I. Professional Fund-Raisers And Fund-Raising Counsel Play A Significant Role In The Large And Growing Charitable Solicitation Industry.

The business of soliciting for charity is a large and growing business with hundreds of billions of charitable dollars at stake. As donors face more and more choices on how they can spend their charitable dollars, their need for information about charities and professional fund-raisers increases. It is essential that professional fund-raisers, fund-raising counsel, and charities continue to be publicly accountable for how charitable funds are spent.

In the last twenty years, charitable giving has risen dramatically. Between 1979 and 1998, charitable giving by individuals has more than tripled from $36.54 billion² to $109.26 billion.³ Soliciting for charity is a large industry. As one author describes it, “[f]und-raising has become big business in the United States as Americans exercise their traditional approach to solving problems, advancing causes, and sustaining programs and institutions by private initiative and voluntary organization.”⁴ Moreover, individual (rather than corporate) giving constitutes the largest percentage of all charitable giving. For example, in 1997, individual contributions constituted 88.83 percent of the $143.46 billion given to charitable organizations.⁵

Professional fund-raisers, professional solicitors and professional fund-raising counsel are generally described as persons who, for profit or compensation, solicit or assist in the solicitation of contributions. They are usually for-profit entities that perform a variety of services such as drafting and mailing solicitation materials, designing fund-raising campaigns, planning and coordinating fund-raising campaigns, collecting donated funds, telemarketing or engaging in door-to-door solicitations. They may take a share (percentage) of the funds contributed, may be paid a flat fee or may be paid based on the number of solicitations (e.g., per letter). The extent to which these for-profit entities are characterized as professional solicitors, commercial fund-raisers, fund-raising counsel, etc., varies from state to state and depends on which functions are performed and each state's definition. Nevertheless, generally speaking, the extent and nature of their participation in the solicitation process and the amount of compensation they receive is set forth in the registration materials filed by the professional fund-raiser and/or the charity for which it solicits.

For example, professional fund-raisers are often required to file with public officials copies of their contracts with their client charities. See, e.g., Ark. Code Ann. § 17-34-110(a) (1997); Md. Code Ann., Bus. Reg. § 6-501(b) (Supp. 1997); and Me. Rev. Stat. Ann. tit. 9, §5009 (West 1997). The contracts describe the nature and extent of the services to be provided and the compensation to be paid. From the contract, prospective donors may be able to determine, for instance, the amount of their contribution (or of all contributions) that will be paid to the fund-raiser. Additionally, professional fund-raisers may be required to file campaign reports which detail the amount of money raised in a solicitation campaign, the net expenses of the campaign and how much money was paid to the charity.

Professional fund-raisers are an integral part of the charitable solicitation process and often receive a significant portion of the charitable funds raised. See discussion infra pp. 7-9. Because of the increasing sophistication of this industry, charities rely on the expertise offered by professional fund-raisers (many of whom identify themselves as professional fund-raising counsel) to compete successfully for charitable donations.⁶ For example, direct mail solicitations, regularly received in many homes in America, are highly sophisticated. They bear the signature of famous people, have personal notes written across the page, bear post-it notes resembling hastily written pleas for money, and have blurred postmarks making it difficult to determine the point of origin of the letter.⁷ In addition, professional fund-raisers who plan direct mail campaigns have sophisticated techniques for targeting potential donors from available mailing lists.⁸

This reliance on professional fund-raisers (primarily fund-raising counsel) for direct mail and direct marketing campaigns (including radio, TV and magazine advertising designed specifically to solicit donations) is evident from a recent study. The study found that out of approximately $120 billion contributed by individuals, more than half of the contributions were given through charitable solicitation campaigns; much of it was likely through the assistance of professional fund-raisers, solicitors and fund-raising counsel.⁹

II. State Oversight Of Professional Fund-Raisers And Fund-Raising Counsel Is Essential For Public Accountability.

The movement of states to exercise oversight with respect to the activities of professional fund-raisers began in the 1950's, in large part due to widely publicized deceptive practices in connection with solicitations.¹⁰ In response to the trilogy of Supreme Court cases that dealt with regulation of professional fund-raisers in the 1980's,¹¹ many states revised their registration statutes to enhance the public accountability of professional fund-raisers and the charities on whose behalf they work to obtain charitable contributions. Currently, 42 states require professional fund-raisers to register and comply with related requirements of their charitable solicitation statutes.¹²

Registering charitable organizations and professional fund-raisers is the primary tool available to donors and law enforcement agencies to ensure public disclosure of solicitation activities of charities and professional fund-raisers. Through registration, as one court wrote,

[t]he state can protect its citizens from fraudulent solicitation and insure that funds actually find their way to the organization for which the solicitation was given by requiring a stranger in the community to establish his identity and his authority to act for the cause he purports to represent before permitting him to publicly solicit funds for any purpose.

Church of Scientology Flag Services Org., Inc. v. City of Clearwater, 756 F. Supp. 1498, 1515 (M.D.Fla. 1991).

State and local government agencies have refined their law enforcement role and have become virtually the only repositories of comprehensive information on charitable solicitation activities conducted by professional fund-raisers for donors in their own respective state or community. Following a suggestion made by the Supreme Court in Riley v. National Federation of the Blind of North Carolina, Inc., 487 U.S. 781, 800 & n.11 (1988), public officials have publicized the information obtained from charities and their professional fund-raisers to educate donors.¹³ Public officials have found that

[t]he systematic and timely release of accurate and comprehensive financial and programmatic information on charities and/or professional fund-raisers is an extremely useful regulatory tool. The public is hungry for this information, which is not readily available from any other source. When done properly, it is a powerful form of disclosure that is far more effective than the difficult-to-enforce disclosure provision declared unconstitutional in 1988.¹⁴

In recent years, state Attorneys General have published reports about paid telephone soliciting and key financial data on registered charities. For example, the California Attorney General's seventh annual report on commercial fund-raisers in 1997 found that less than 37 cents of every dollar (out of a total of $175 million) raised by commercial fund-raisers¹⁵ in California actually went to a charitable organization.¹⁶ The Illinois Attorney General's Office reported that in 1997, registered professional fund-raisers raised $114 million of which charities received only $30 million. Professional fund-raiser fees averaged 74 cents of each dollar donated with charities netting only 26 cents of each dollar.¹⁷ In 1997, the Attorney General and Secretary of State of Washington state reported that of the $101 million collected by professional fund-raisers,¹⁸ $41 million (or less than 40 percent) went to charities.¹⁹ In 1998, the New York Attorney General's Office reported that of the $145.2 million raised by professional telemarketers, $35.9 million, or 24.75 percent, was given to charitable organizations.²⁰

Furthermore, California's report found that in 1996, out of the 525 commercial fund-raising campaigns run in California:

• 28 percent gave more than half of the funds raised to the charity for which the money was raised;
• 11 percent of the campaigns gave 31-50 percent to charity;
• 20 percent of the campaigns gave 21-30 percent to charity;
• 12 percent of the campaigns gave 16-20 percent to charity; and
• 29 percent of the campaigns gave less than 15 percent to charity.²¹

Washington's report similarly found that in 1997, a full third of fund-raisers gave only 20 percent of the receipts to the charities and that 8 percent gave 10 percent or less to the charities.²² Likewise, in 1998, New York found that in 76.10 percent of the telemarketing campaigns less than 40 percent of the money raised was paid to charities.²³ The following chart provides the breakdown of the statistics revealed by information filed by professional fund-raisers in New York.

Percent to Charity	Number of Campaigns	Percent of Campaigns
90-100+%	3	.5%
80-89%	5	.8%
70-79%	8	1.3%
60-69%	24	4.0%
50-59%	44	7.2%
40-49%	61	10.0%
30-39%	123	20.2%
20-29%	188	30.9%
10-19%	90	14.8%
Below 0-9%	62	10.2%24

Other reports have noted comparable results.²⁵

In most states, citizens can call their public officials to obtain information on registered charitable organizations and professional fund-raisers.²⁶ In Maryland, the state's public information program is statutorily mandated.²⁷ In addition, information is available on the Internet, and states are implementing sophisticated data processing techniques which will enable them to make the information more widely available.²⁸

Registration of professional fund-raisers sheds the light of disclosure onto fund-raising expenditures so that a giving public can make informed choices. Registration documents filed by professional fund-raisers provide information to donors and public officials that are not otherwise specifically available from reports filed by charities, such as the number of campaigns conducted, the funds raised in each campaign, the amount given to the charity, and the financial compensation and expenses paid to the professional fund-raiser. Donors use this information to determine the charity that will receive their donation and also to double-check information they receive during solicitations. Consequently, donors are often the first to detect and report fraudulent, misleading or deceptive practices by charities and professional fund-raisers.

The registration programs in Utah and other states and counties are vital. Sophisticated donors are demanding more than information so they can make informed choices about how to spend their charitable dollars. One long-time observer of this industry asserts that

the public is demanding greater accountability from nonprofit, principally charitable organizations. The consumerism movement is causing individual and corporate donors to be more concerned and sophisticated about the uses of their gift dollars. The emphasis is now on disclosure; donors--prospective and actual--are demonstrating greater proclivity to inquire of federal, state and local agencies, lawmakers, independent “watchdog” agencies, and the philanthropic community itself about the fund-raising and fund-expenditure practices of charitable organizations.²⁹

There is no question that a substantial portion of the money donated for charitable purposes through professional fund-raisers is spent for fund-raising and other purposes. To date, the only way for donors to find out what fund-raising activity is occurring in their state and how much a charity is paying a professional fund-raiser is to check the information (e.g., contracts and solicitation campaign financial reports) filed by the professional fund-raiser with their state or local authority.³⁰ Unfortunately, no other sources of information on fund-raising costs provide the kind of data needed by citizens to determine the total percentage of their donated dollars that ends up in hands of professional fund-raisers rather than in the hands of the charity.

It is also important for a donor or an enforcement agency to be able to review both the contract between a charity and its professional fund-raiser and the results of their solicitation campaigns, including expenses. A review of the contract can reveal the degree of control the professional fund-raiser has over the charity and the charitable solicitation activities, including control over the disbursement of the funds received, the list of donors and the charity's programs and activities. For example, the Minnesota Attorney General's Office sued a charity and its professional fund-raising counsel for mailing misleading and deceptive solicitations into Minnesota claiming to fight children's cancer through prevention and detection, when the charity did not fight children's cancer through prevention and detection. A copy of the Complaint is included in the Appendix at 1. In that case, the Minnesota Attorney General's Office used the fund-raising contract on file to help determine the extent of the professional fund-raising counsel's involvement in the direct mail solicitations (which is similar to ATA's involvement in Judicial Watch's solicitations). See, e.g., Amici Appendix, paras. 34 and 35 at 8.³¹ The Consent Judgment enjoins the charity and the professional fund-raising counsel from violating Minnesota's charitable solicitation laws, including those that prohibit false, misleading and deceptive practices and require specific disclosures at the time of solicitation. The Consent Decree also requires the charity to reform its financial controls, including taking steps to ensure that contracts for direct mail fund-raising services are fair and reasonable. The professional fund-raising counsel agreed to pay $110,000 for restitition, civil penalties, attorneys' fees and costs and the charity agreed to pay $15,000 for restitution, civil penalties, attorneys' fees and costs. A copy of the Consent Judgment is included in the Appendix at 54.

If Utah's professional fund-raiser registration statute were struck down, donors in Utah will have no way to learn about the activities of charities and professional fund-raisers in their state. They would have no ability to determine, for example, if a charity is indeed a local group seeking help or a big business mass mailing solicitations to millions of people. Moreover, in many instances, donors will not be able to trace the identity of the professional fund-raiser who was the driving force behind the design, planning and/or implementation of the charitable solicitation. Utah's professional fund-raiser registration statute, which is similar to many other states' statutes, provides the only means for donors in Utah and elsewhere to have access to critical information in a manner that survives scrutiny by the U.S. Supreme Court.

III. Courts Have Repeatedly Upheld Professional Fund-Raiser Registration Statutes.

The United States Supreme Court has long recognized the constitutionality of state regulation of entities involved in charitable fund-raising, through registration, mandatory reporting, and governmental publication of information on charitable campaigns. For example, in Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980), the Court noted that the Village's "legitimate interest in preventing fraud can be better served by measures less intrusive than a direct prohibition on solicitation." The Court went on to explain,

Fraudulent misrepresentations can be prohibited and the penal laws used to punish such conduct directly. [Citations omitted.] Efforts to promote disclosure of the finances of charitable organizations also may assist in preventing fraud by informing the public of the ways in which their contributions will be employed. [Footnote omitted.] Such measures may help make contribution decisions more informed, while leaving to individual choice the decision whether to contribute to organizations that spend large amounts on salaries and administrative expenses.

444 U.S. at 637-38. The Court went on to note with favor Illinois' requirement that charities register with the state Attorney General and report certain information about their structure and fund-raising activities. See 444 U.S. at 638 n.12. Four years later, in Secretary of State of Maryland v. Joseph H. Munson Co., Inc., 467 U.S. 947, 961-62 & n.9 (1984), the Court cited with approval Schaumburg's endorsement of measures "less intrusive than a direct prohibition on solicitation," including mandatory disclosure of charities' finances to allow members of the public to make informed decisions about whether to contribute a particular cause.

This theme was struck once again in Riley, 487 U.S. 781, 800 & n.11, where the Court voiced its approval of "benign and narrowly tailored options" to reduce donor misperception of how contributed dollars are used. The Court in Riley went on to suggest that a state may license fundraisers, in keeping with government's constitutional authority to impose "valid time, place, or manner restrictions," as long as there is no unreasonable delay in reaching a decision as to whether to issue a license or not. 487 U.S. at 802 (citation omitted).

Common to Munson, Schaumburg and Riley is the distinction between restricting charitable fund-raising activities or mandating fundraiser speech, on the one hand, and requiring that fund-raisers provide information needed to allow the state to inform the public about the campaign or to combat fraud. The former is constitutionally suspect; the latter is not. Of course, without registration, a modicum of public disclosure, and bonding, states have no information on fund-raising campaigns to make available to the public, no way of letting prospective donors know that that information exists, and a diminished ability to protect the public from fraud. See, e.g., Telco Communications, Inc. v. Carbaugh, 885 F.2d 1225 (4th Cir. 1989) (upholding statutory requirement that paid fund-raisers disclose in writing that financial statements are available from state); and Hechler v. Christian Action Network, 201 W. Va. 71, 491 S.E.2d 618 (1997) (upholding statutory requirement that fund-raisers include a conspicuous and prominently placed statement in their solicitations that summary of registration and financial documents is available from state).

The necessary, and constitutionally legitimate, elements of state protection of donors--registration, filing of information with the state, and public access to information--are described this way in Carbaugh:

Informing the public, . . . and preventing fraud . . ., are substantial state interests. . . . While there are distinct limits on the extent to which private entities may be enlisted by the state in this educative function, . . . the state interest in adding to the public knowledge of professional solicitations is not one that is inherently incompatible with the First Amendment. The requirement of [a statute requiring disclosure of the availability of information from the state] educates the public generally about the availability of financial information on solicitors. It informs a donor that information on the soliciting entity is available from the [state], and that, by implication, information about other solicitors is also available. The information contained in the financial statement, moreover, is invaluable. A donor can use this information to determine if a particular solicitation is bona fide by ascertaining whether the solicitor is registered. A donor might also use this information to learn further about a solicitor's operations. Additionally, this section assists in preventing fraud. When comparative information is available, inaccuracies in inducements are less likely to occur. If they do occur, they are more likely to be discovered.

885 F.2d at 1231-32 (citations omitted).

Predictably, professional fund-raiser registration statutes as a whole have been repeatedly upheld by the courts. See Special Programs, Inc. v. Courter, 923 F. Supp. 851 (E.D. Va. 1996); Dayton Area Visually Impaired Persons v. Fisher, 70 F.3d 1474, 1484 (6th Cir. 1995); National Awareness Foundation v. Abrams, 50 F.3d 1159 (2d Cir. 1995); Church of Scientology Flag Services Org., Inc. v. City of Clearwater, 756 F. Supp. 1498 (M.D. Fla. 1991); Indiana Voluntary Firemen's Association, Inc. v. Pearson, 700 F. Supp. 421, 448 (S.D. Ind. 1988); Heritage Pub. Co. v. Fishman, 634 F. Supp. 1489, 1499 (D. Minn. 1986). When courts have struck down portions of professional fund-raiser registration statutes, they have limited their rulings to specific provisions of those statutes that imposed fund-raising caps, mandated point-of-contact disclosures related to the percentage of funds that are paid to professional fund-raisers, and permitted an unlimited delay in governmental action on a license application. See Riley, 487 U.S. at 785, 803; Munson, 467 U.S. at 962-969; Schaumberg, 444 U.S. at 633-640; National Federation of the Blind of Colorado, Inc. and Fraternal Order of Police, Colorado Metroplex, Inc. v. Norton, No. Civ. A. 97-K-1396, 1997 WL 726029, at *3 (D. Colo., Nov. 20, 1997); Kentucky State Police Professional Association v. Gorman, 870 F.Supp. 166 (E.D.Ky. 1994); Indiana Voluntary Firemen's Association, Inc. v. Pearson, 700 F. Supp. at 442-47. Absent such constitutional defects, courts, as shown, have consistently upheld the professional fund-raiser registration process. In fact, the Supreme Court in Riley implicitly upheld such a regulatory system when it suggested that states use the registration materials to make important disclosures to prospective donors. See Riley, 487 U.S. at 800.

In only one case has a court dealt directly with the issue of personal jurisdiction. In that case, which dealt with Appellant ATA's predecessor Richard A. Viguerie Company, Inc.,³² the court held that the nature of the compensation received, the nature of the advice and expertise provided, and the financial relationship between the fund-raising consultant and the charity (including a first claim on future contributions), constituted sufficient minimum contacts for the fund-raising consultant to be subject to New York's regulatory statutes.³³

CONCLUSION

Soliciting charitable contributions is a huge and competitive business which has long been subject to oversight by public officials. The principle underlying that oversight is that “[t]he greatest possible portion of the wealth donated to private charity must be conserved and used to further the charitable, public purpose; waste must be minimized and diversion of funds for private gain intolerable.”³⁴ Only through the registration process for both charities and professional fund-raisers are donors able to ensure that the use of their charitable dollars is maximized and that recipient charities make prudent decisions regarding fund-raising expenses. The amici request that the Court uphold Utah's professional fund-raiser registration statute so the Department of Commerce can continue its important function of overseeing charitable solicitation activities in Utah and ensuring that professional fund-raisers and fund-raising counsel are publicly accountable to Utah donors.

Respectfully submitted,

Dated:

__________________________
MIKE HATCH
Attorney General
State of Minnesota

________________________________
ROBERTA J. CORDANO
Assistant Attorney General
Attorney Reg. No. 210213

Suite 1200 NCL Tower
445 Minnesota Street
St. Paul, MN 55101-2130
(612) 296-1716 (voice)

ON BEHALF OF:

Arkansas Attorney General Mark Pryor
California Attorney General Bill Lockyer
Florida, Pinellas County Attorney Susan H. Churuti
Hawaii Office of Consumer Protection, Jo Ann M. Uchida
Illinois Attorney General James E. Ryan
Indiana Attorney General Jeffrey A. Modisett
Kentucky Attorney General Ben Chandler
Massachusetts Attorney General Scott Harshbarger
Maine Attorney General Andrew Ketterer
Maryland Attorney General J. Joseph Curran, Jr.
Michigan Attorney General Jennifer M. Granholm
Mississippi Secretary of State Eric Clark
New Hampshire Attorney General Philip T. McLaughlin
New Jersey Attorney General Peter Verniero
New Mexico Attorney General Patricia A. Madrid
New York Attorney General Eliot Spitzer
North Carolina Attorney General Michael F. Easley
North Dakota Attorney General Heidi Heitkamp
Ohio Attorney General Betty D. Montgomery
Oklahoma Attorney General W.A. Drew Edmondson
Oregon Attorney General Hardy Myers
Pennsylvania Attorney General Mike Fisher
Vermont Attorney General William H. Sorrell
Virginia Attorney General Mark L. Earley
Washington Attorney General Christine O. Gregoire
West Virginia Attorney General Darrell V. McGraw, Jr.

² Bruce R. Hopkins, Charity Under Siege: Government Regulation Of Fund Raising 13 (1980) (citing Giving USA, 1980 Report of American Association of Fund-Raising Counsel).

³ Giving USA (AAFRC Trust for Philanthropy, 1998) .

⁴ Hopkins, supra, at 28.

⁵ Giving USA (AAFRC Trust for Philanthropy, 1998). The 88.83 percent figure includes bequests given by individuals. Bequests constituted 12.63 percent of all contributions and individual contributions constituted 76.2 percent.

⁶ Susan Headden, The Junk Mail Deluge, U.S. News And World Report, December 8, 1997, at 40.

⁷ See, e.g., Matthew Sinclair, Envelopes Key Extremely Urgent Response: But, Make Sure the Message Is Important, The Nonprofit Times Direct Marketing Edition, August 15, 1997, at 1.

⁸ See, e.g., Rose Harper, Mailing List Strategies: A Guide To Direct Mail Success (1986).

⁹ Direct Marketing Associates, Economic Impact: U.S. Direct Marketing Today, Dial M for Money, Responsive Philanthropy, Fall 1997, at 10.

¹⁰ See Leslie Espinoza, Straining the Quality of Mercy: Abandoning the Quest for Informed Charitable Giving, 64 S. Cal. L. Rev. 605, 635-47 (1991) (in United States, unlike in England, charities have always been overseen by local public officials because charities have traditionally been closely tied to local religious and social community).

¹¹ See Riley v. Federation of the Blind of North Carolina, Inc., 487 U.S. 781 (1988); Secretary of State of Maryland v. Joseph H. Munson, 467 U.S. 947 (1984); and Schaumberg v. Citizens for a Better Environment, 444 U.S. 620 (1980).

¹² See Ala. Code §§ 13A-9-70-84 (Supp. 1997); Alaska Stat. § 45.68.010-.900 (1996); Ariz. Rev. Stat. Ann. §§ 44-6551 to 6561 (1994 & Supp. 1997); Ark. Code Ann. § 17-41-101 to 111 (1995); Cal. Gov't Code § 12599 (1992 & Supp. 1998); Colo. Rev. Stat. §§ 6-16-101 to 104 (1997); Conn. Gen. Stat. §§ 21a-175 to 190l (1997); Del. Code Ann. tit. 6, §§ 2591-97 (Supp. 1996); Fla. Stat. ch. 496.401-426 (1995); Ga. Code Ann. §§ 43-17-1 to 23 (1994 & Supp. 1997); Haw. Rev. Stat. §§ 467B-1 to 14 (1993 & Supp. 1994); Ill. Ann. Stat. 225 ILCS, paras. 460/1-460/23 (Smith-Hurd 1997); Ind. Code Ann. §§ 23-7-8-1 to 9 (Burns 1995); Iowa Code §§ 13C.1-8 (1995); Kan. Stat. Ann. § 17-1759 to 1775 (1995); Ky. Rev. Stat. Ann. §§ 367.650-667 (Michie/Bobbs-Merrill 1997); Me. Rev. Stat. Ann. tit. 9, §§ 5001-16 (West 1997); Md. Code Ann., Bus. Reg. §§ 6-101 to 621 (Supp. 1997); Mass. Ann. Laws Ch. 68, §§ 18-35 (Law Co-op 1991 & Supp. 1997); Mich. Comp. Laws Ann. §§ 400.271-293 (1997); Minn. Stat. §§ 309.50-.60 (1996); Miss. Code Ann. §§ 79-11-501 to 529 (Supp. 1997); Mo. Ann. Stat. §§ 407.450-478 (Vernon 1990 & Supp. 1998); N.H. Rev. Stat. Ann. §§ 7:19-7:32b (1988 & Supp. 1997); N.J. Rev. Stat. Ann. §§ 45-17A-25 to 40 (1995 & Supp. 1997); N.Y. Executive Law §§ 171-a. to 177 (McKinney 1993 & Supp. 1997); N.C. Gen. Stat. §§ 131F-1 to 33 (1997); N.D. Cent. Code §§ 50-22-01 to 05 (Supp. 1997); Ohio Rev. Code Ann. §§ 1716.01-99 (Anderson 1997); Okla. Stat. Ann. tit. 18, §§ 552.1-18 (1986 & Supp. 1998); Or. Rev. Stat. §§ 128.801-.995 (1995); Pa. Stat. Ann. tit. 10, §§ 162.1-24 (Supp. 1997); R.I. Gen. Laws §§ 5-53-1 to 14 (1995 & Supp. 1997); S.C. Code Ann. §§ 33-56-10 to 200 (Supp. 1997); Tenn. Code Ann. §§ 48-101-501 to 508 (Supp. 1997); Tex. Rev. Civ. Stat. Ann. arts. 9023b, c and e (West Supp. 1998) (only applies to professional fund-raisers soliciting on behalf of certain organizations); Utah Code Ann. §§ 13-22-2 to 21 (Supp. 1997); Vt. Stat. Ann. tit. 9, §§ 2471-79 (1993 & Supp. 1997); Va. Code Ann. §§ 57-48 to 69 (1995 & Supp. 1997); Wa. Rev. Code Ann. §§ 19.09.020-.915 (Supp. 1997); W. Va. Code §§ 29-19-2 to 15 (Supp. 1997); Wis. Stat. §§ 440.41-48 (West 1997). (Amicus New Mexico does not currently have a professional fund-raiser registration statute.)

¹³ In Riley, 487 U.S. at 800, the Court followed its reasoning in Secretary of State of Maryland v. Joseph H. Munson Co., that it is constitutional to require filing information with public officials. The Court stated that a state “may itself publish the detailed financial disclosure forms it requires professional fund-raisers to file.” Also, in Schaumberg, 444 U.S. at 637-38, the Court said, “Efforts to promote disclosure of the finances of charitable organizations also may assist in preventing fraud by informing the public of the ways in which their contributions will be employed.”

¹⁴ Hopkins, The Law of Fund-Raising, § 2.6 at 40-47 (2d ed. 1996 & Supp. 1998).

¹⁵ Under California's statute, a ‘commercial fund-raiser' is defined as any individual or business, other than a charity or the charity's employees or unpaid volunteers, who for compensation solicits funds for charitable purposes, or who receives or controls funds raised in California through charitable solicitations. Cal. Gov't Code § 12599 (1992 & Supp. 1998).

¹⁶ Office of Attorney General, California, Attorney General's Report on Charitable Solicitations by Commercial Fundraisers (“California Attorney General”) (Dec. 1997) at 1.

¹⁷ Office of Attorney General, Illinois, Professional Fund-raising Report (“Illinois Attorney General”) (July 1997), at Table A at 12; Table B at 14.

¹⁸ Washington's report only includes figures from registered commercial fund-raisers.

¹⁹ Office of Attorney General and Office of Secretary of State, Washington, How Much for Charity? How Much for Profit and Expenses? (“Washington Attorney General and Secretary of State”) (Nov. 1997) at 1.

²⁰ Office of Attorney General, New York, Pennies for Charity (“New York Attorney General”) (Oct. 1998) at ii. Although New York also requires professional fund-raising counsel and professional fund-raisers to register, this report only covered results from campaigns conducted by telemarketers. See N.Y. Executive Laws §§ 171-a to 177 (McKinney 1993 & Supp. 1997).

²¹ California Attorney General's Office, supra, at 24. California's report also included a strong message about the need to register professional fund-raising counsel. In its report, California observed that “[m]any companies that previously reported to the Attorney General as commercial fund-raisers now claim to be fundraising counsel, and thereby exempt from reporting to the Attorney General.” This report echoes the concern of many donors and states that if professional fund-raising counsel are not required to register, information about for-profit companies that oversee and conduct direct mail campaigns, without having any custody of funds, will not be subject to public accountability. Indeed, in 1998, the California legislature amended this statute to include “Fundraising counsel for charitable purposes,” which is a person who “for compensation plans, manages, advises, counsels, concults, or prepares material for, or with respect to, the solicitation in this state of funds, assets or property for charitable purposes.”

²² Washington Attorney General and Secretary of State, supra, at 1.

²³ New York Attorney General's Office, supra, at ii. In 1997, the New York Attorney General's Office found that of the 73.10 percent of telemarketing campaigns, less than 40 percent of the money raised was paid to charities. Office of Attorney General, New York, Pennies for Charity (Oct. 1997) at ii.

²⁴ New York Attorney General, supra.

²⁵ See supra, at notes 16, 17, 19, and 20; see also Office of Attorney General, Minnesota, Checking on Charities, 1995, 1996, 1997 and 1998 (reports on charities that include fund-raising expenses); Office of Attorney General, New York, Pennies for Charity, 1995, 1996 and 1997, Where the Money Goes, 1996 and 1997; Office of Attorney General, Vermont, Paid Fundraising in Vermont 1990-1992 (June 1993); Office of Attorney General, Vermont, Where Have All The Dollars Gone? Paid Fundraising in Vermont 1993-1997 (Dec. 1998).

²⁶ New Jersey's statute mandates this service be available. See N.J. Rev. Stat. Ann. § 45:17A-37 (1995).

²⁷ See Md. Code Ann., Bus. Reg. § 6-201 (Supp. 1997).

²⁸ See, e.g., Pennsylvania Department of State, Bureau of Charitable Organizations' website at www.dos.state.pa.us; New Jersey Attorney General's Office's website at www.state.nj.us; Maryland Secretary of State's website at www.sos.state.md.us; Minnesota Attorney General's Office's website at www.ag.state.mn.us; Vermont Attorney General's Office's website at www.state.vt.us/atg; and New York Attorney General's Office's website at www.oag.state.ny.us/charities.html/.

²⁹ Bruce R. Hopkins, The Law of Fund-Raising, at § 1.4 at 16-17.

³⁰ The information, including the IRS Form 990, filed by charitable organizations with many states typically does not provide detailed or current information about each charitable solicitation campaign and how much money is actually paid to each professional fund-raiser. For example, the Form 990 typically presents summary data of all of the charitable organization's fund-raising activities, whereas the information filed by the professional fund-raiser is specific to each fund-raising campaign. In addition, information in the Form 990 is largely retrospective in nature, whereas the contracts and campaign financial information on file reflects current solicitation activities.

³¹ See also, e.g., United Cancer Council, Inc. v. Commissioner of Internal Revenue, 109 T.C. No. 17, 1997 WL 739558 (U.S. Tax Ct.), Tax Ct. Rep. (CCH) ¶ 52,378 (Dec. 2, 1997) (upholding lower court's ruling that charity's tax-exempt status must be revoked based on information from contract and solicitation campaign results, which revealed that terms of the contract gave professional fund-raising counsel excessive control over the charity's fund-raising and finances and that compensation received by professional fund-raising counsel under contract, including ability to rent charity's donor names for its own account, was not balanced by risk assumed by fund-raising counsel).

³² Richard Viguerie is the President of ATA.

³³ See State of New York v. Richard A. Viguerie Co., 86 Misc.2d 506, 382 N.Y.S.2d 622 (N.Y. Sup. 1976), modified on other grounds, 55 A.D.2d 535, 389 N.Y.S.2d 548 (N.Y.A.D. 1 Dept. 1976). It is clear that a person who places in the hands of others the “means and instrumentalities” through which members of the public can be misled is himself liable for consumer fraud. See, e.g., Regina Corp. v. FTC, 322 F.2d 765, 768 (3d Cir. 1963); Waltham Watch Co. v. FTC, 318 F.2d 28, 32 (7th Cir. 1963); Irwin v. FTC, 143 F.2d 316, 325 (8th Cir. 1944); see also In re Scali, McCabe, Sloves, Inc., 115 FTC 96 (1992) (advertising agency held liable for consumer fraud); FTC's Telemarketing Sales Rule, 16 C.F.R. § 310.3(b) (it is deceptive for a person to provide substantial assistance or support to any seller or telemarketer when person knows or consciously avoids knowing that seller or telemarketer is engaged in violations of Rule). As a result, a paid fund-raising counsel who assists a charity in preparing solicitation methods or materials is potentially liable for any deception contained therein and is thus a proper subject of governmental monitoring to ensure fraud-free fund-raising.

³⁴ Kenneth L. Karst, The Efficiency of the Charitable Dollar: An Unfulfilled State Responsibility, 73 Harv.L.Rev. 433-34 (1960). Professor Karst is often credited with providing the catalyst for oversight over fund-raisers in the United States.