103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB0072

 

Introduced 1/20/2023, by Sen. Laura M. Murphy

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 460/1  from Ch. 23, par. 5101
225 ILCS 460/4  from Ch. 23, par. 5104

    Amends the Solicitation for Charity Act. Defines "reviewed financial statements". Provides that every charitable organization that receives in any 12-month period ending upon its established fiscal or calendar year contributions in excess of $500,000 (rather than $300,000) shall file a written report meeting specified criteria with the Attorney General. Provides that a charitable organization that receives in excess of $300,000, but not in excess of $500,000, shall file a written report meeting other specified criteria with the Attorney General upon forms prescribed by the Attorney General. Provides that the Attorney General, within a binding nonjudicial settlement agreement, may accept a written assurance of discontinuance of any method, act, or practice alleged to be a violation of the reporting requirements from the person who has engaged in the method, act, or practice. Provides that the changes made by the amendatory Act are inoperative on and after January 1, 2029. Effective January 1, 2024.


LRB103 25004 AMQ 51338 b

 

 

A BILL FOR

 

SB0072LRB103 25004 AMQ 51338 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Solicitation for Charity Act is amended by
5changing Sections 1 and 4 as follows:
 
6    (225 ILCS 460/1)  (from Ch. 23, par. 5101)
7    Sec. 1. Definitions. The following words and phrases as
8used in this Act shall have the following meanings unless a
9different meaning is required by the context.
10    (a) "Charitable organization" means any benevolent,
11philanthropic, patriotic, or eleemosynary person or one
12purporting to be such which solicits and collects funds for
13charitable purposes and includes each local, county, or area
14division within this State of such charitable organization,
15provided such local, county, or area division has authority
16and discretion to disburse funds or property otherwise than by
17transfer to any parent organization.
18    (b) "Contribution" means the promise or grant of any money
19or property of any kind or value, including the promise to pay,
20except payments by union members of an organization. Reference
21to the dollar amount of "contributions" in this Act means in
22the case of promises to pay, or payments for merchandise or
23rights of any other description, the value of the total amount

 

 

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1promised to be paid or paid for such merchandise or rights and
2not merely that portion of the purchase price to be applied to
3a charitable purpose. Contribution shall not include the
4proceeds from the sale of admission tickets by any
5not-for-profit music or dramatic arts organization which
6establishes, by such proof as the Attorney General may
7require, that it has received an exemption under Section
8501(c)(3) of the Internal Revenue Code and which is organized
9and operated for the presentation of live public performances
10of musical or theatrical works on a regular basis. For
11purposes of this subsection, union member dues and donated
12services shall not be deemed contributions.
13    (c) "Person" means any individual, organization, group,
14association, partnership, corporation, trust, or any
15combination of them.
16    (d) "Professional fund raiser" means any person who for
17compensation or other consideration, conducts, manages, or
18carries on any solicitation or fund raising drive or campaign
19in this State or from this State or on behalf of a charitable
20organization residing within this State for the purpose of
21soliciting, receiving, or collecting contributions for or on
22behalf of any charitable organization or any other person, or
23who engages in the business of, or holds himself or herself out
24to persons in this State as independently engaged in the
25business of soliciting, receiving, or collecting contributions
26for such purposes. A bona fide director, officer, employee, or

 

 

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1unpaid volunteer of a charitable organization shall not be
2deemed a professional fund raiser unless the person is in a
3management position and the majority of the individual's
4salary or other compensation is computed on a percentage basis
5of funds to be raised, or actually raised.
6    (e) "Professional fund raising consultant" means any
7person who is retained by a charitable organization or trustee
8for a fixed fee or rate that is not computed on a percentage of
9funds to be raised, or actually raised, under a written
10agreement, to only plan, advise, consult, or prepare materials
11for a solicitation of contributions in this State, but who
12does not manage, conduct or carry on a fundraising campaign
13and who does not solicit contributions or employ, procure, or
14engage any compensated person to solicit contributions and who
15does not at any time have custody or control of contributions.
16A volunteer, employee, or salaried officer of a charitable
17organization or trustee maintaining a permanent establishment
18or office in this State is not a professional fundraising
19consultant. An attorney, investment counselor, or banker who
20advises an individual, corporation, or association to make a
21charitable contribution is not a professional fundraising
22consultant as a result of the advice.
23    (f) "Charitable purpose" means any charitable, benevolent,
24philanthropic, patriotic, or eleemosynary purpose.
25    (g) "Charitable Trust" means any relationship whereby
26property is held by a person for a charitable purpose.

 

 

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1    (h) "Education Program Service" means any activity which
2provides information to the public of a nature that is not
3commonly known or facts which are not universally regarded as
4obvious or as established by common understanding and which
5informs the public of what it can or should do about a
6particular issue.
7    (i) "Primary Program Service" means the program service
8upon which an organization spends more than 50% of its program
9service funds or the program activity which represents the
10largest expenditure of funds in the fiscal period.
11    (j) "Professional solicitor" means any natural person who
12is employed or retained for compensation by a professional
13fund raiser to solicit, receive, or collect contributions for
14charitable purposes from persons in this State or from this
15State or on behalf of a charitable organization residing
16within this State.
17    (k) "Program Service Activity" means the actual charitable
18program activities of a charitable organization for which it
19expends its resources.
20    (l) "Program Service Expense" means the expenses of
21charitable program activity and not management expenses or
22fund raising expenses. In determining Program Service Expense,
23management and fund raising expenses may not be included.
24    (m) "Public Safety Personnel Organization" means any
25person who uses any of the words "officer", "police",
26"policeman", "policemen", "troopers", "sheriff", "law

 

 

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1enforcement", "fireman", "firemen", "paramedic", or similar
2words in its name or in conjunction with solicitations, or in
3the title or name of a magazine, newspaper, periodical,
4advertisement book, or any other medium of electronic or print
5publication, and is not a governmental entity. No organization
6may be a Public Safety Personnel Organization unless 80% or
7more of its voting members or trustees are active or retired
8police officers, police officers with disabilities, peace
9officers, firemen, fire fighters, emergency medical
10technicians - ambulance, emergency medical technicians -
11intermediate, emergency medical technicians - paramedic,
12ambulance drivers, or other medical assistance or first aid
13personnel.
14    (m-5) "Public Safety Personnel" includes police officers,
15peace officers, firemen, fire fighters, emergency medical
16technicians - ambulance, emergency medical technicians -
17intermediate, emergency medical technicians - paramedic,
18ambulance drivers, and other medical assistance or first aid
19personnel.
20    (n) "Trustee" means any person, individual, group of
21individuals, association, corporation, not for profit
22corporation, or other legal entity holding property for or
23solicited for any charitable purpose; or any officer,
24director, executive director or other controlling persons of a
25corporation soliciting or holding property for a charitable
26purpose.

 

 

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1    (o) "Reviewed financial statements" means procedures
2performed on financial statements in accordance with
3statements on standards for accounting and review services
4issued by the American Institute of Certified Public
5Accountants, in which a certified public accountant obtains
6limited assurance as a basis for reporting whether the
7accountant is aware of any material modifications that should
8be made to the financial statements for them to be in
9accordance with the specified basis of accounting. This
10subsection is inoperative on and after January 1, 2029.
11(Source: P.A. 99-143, eff. 7-27-15.)
 
12    (225 ILCS 460/4)  (from Ch. 23, par. 5104)
13    Sec. 4. Annual reporting for charities.
14    (a) Every charitable organization registered pursuant to
15Section 2 of this Act which shall receive in any 12-month
16period ending upon its established fiscal or calendar year
17contributions in excess of $500,000 $300,000 and every
18charitable organization whose fund raising functions are not
19carried on solely by staff employees or persons who are unpaid
20for such services, if the organization shall receive in any
2112-month period ending upon its established fiscal or calendar
22year contributions in excess of $25,000, shall file a written
23report with the Attorney General upon forms prescribed by him
24or her, on or before June 30 of each year if its books are kept
25on a calendar basis, or within 6 months after the close of its

 

 

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1fiscal year if its books are kept on a fiscal year basis, which
2written report shall include a financial statement covering
3the immediately preceding 12-month period of operation. Such
4financial statement shall include a balance sheet and
5statement of income and expense, and shall be consistent with
6forms furnished by the Attorney General clearly setting forth
7the following: gross receipts and gross income from all
8sources, broken down into total receipts and income from each
9separate solicitation project or source; cost of
10administration; cost of solicitation; cost of programs
11designed to inform or educate the public; funds or properties
12transferred out of this State, with explanation as to
13recipient and purpose; cost of fundraising; compensation paid
14to trustees; and total net amount disbursed or dedicated for
15each major purpose, charitable or otherwise. Such report shall
16also include a statement of any changes in the information
17required to be contained in the registration form filed on
18behalf of such organization. The report shall be signed by the
19president or other authorized officer and the chief fiscal
20officer of the organization who shall certify that the
21statements therein are true and correct to the best of their
22knowledge, and shall be accompanied by an opinion signed by an
23independent certified public accountant that the financial
24statement therein fairly represents the financial operations
25of the organization in sufficient detail to permit public
26evaluation of its operations. Said opinion may be relied upon

 

 

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1by the Attorney General.
2    (b) Every organization registered pursuant to Section 2 of
3this Act which shall receive in any 12-month period ending
4upon its established fiscal or calendar year of any year
5contributions:
6        (1) in excess of $15,000, but not in excess of
7    $25,000, during a fiscal year shall file only a simplified
8    summary financial statement disclosing only the gross
9    receipts, total disbursements, and assets on hand at the
10    end of the year on forms prescribed by the Attorney
11    General; or
12        (2) in excess of $25,000, but not in excess of
13    $300,000, if it is not required to submit a report under
14    subsection (a) of this Section, shall file a written
15    report with the Attorney General upon forms prescribed by
16    him, on or before June 30 of each year if its books are
17    kept on a calendar basis, or within 6 months after the
18    close of its fiscal year if its books are kept on a fiscal
19    year basis, which shall include a financial statement
20    covering the immediately preceding 12-month period of
21    operation limited to a statement of such organization's
22    gross receipts from contributions, the gross amount
23    expended for charitable educational programs, other
24    charitable programs, management expense, and fund raising
25    expenses including a separate statement of the cost of any
26    goods, services, or admissions supplied as part of its

 

 

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1    solicitations, and the disposition of the net proceeds
2    from contributions, including compensation paid to
3    trustees, consistent with forms furnished by the Attorney
4    General. Such report shall also include a statement of any
5    changes in the information required to be contained in the
6    registration form filed on behalf of such organization.
7    The report shall be signed by the president or other
8    authorized officer and the chief fiscal officer of the
9    organization who shall certify that the statements therein
10    are true and correct to the best of their knowledge; or .
11        (3) in excess of $300,000, but not in excess of
12    $500,000, if it is not required to submit a report under
13    subsection (a), shall file a written report with the
14    Attorney General upon forms prescribed by the Attorney
15    General, on or before June 30 of each year if its books are
16    kept on a calendar basis, or within 6 months after the
17    close of its fiscal year if its books are kept on a fiscal
18    year basis, which written report shall include a financial
19    statement covering the immediately preceding 12-month
20    period of operation limited to a statement of such
21    organization's gross receipts from contributions, the
22    gross amount expended for charitable educational programs,
23    other charitable programs, management expense, and fund
24    raising expenses, including a separate statement of the
25    cost of any goods, services, or admissions supplied as
26    part of its solicitations, and the disposition of the net

 

 

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1    proceeds from contributions, including compensation paid
2    to trustees, consistent with forms furnished by the
3    Attorney General. Such report shall also include a
4    statement of any changes in the information required to be
5    contained in the registration form filed on behalf of such
6    organization. The report shall be signed by the president
7    or other authorized officer and the chief fiscal officer
8    of the organization who shall certify that the statements
9    therein are true and correct to the best of their
10    knowledge and shall be accompanied by reviewed financial
11    statements, including a report signed by an independent
12    certified public accountant stating that the independent
13    certified public accountant is not aware of any material
14    modifications that should be made to the financial
15    statements in order to permit public evaluation of its
16    operations. The report may be relied upon by the Attorney
17    General.
18    (c) For any fiscal or calendar year of any organization
19registered pursuant to Section 2 of this Act in which such
20organization would have been exempt from registration pursuant
21to Section 3 of this Act if it had not been so registered, or
22in which it did not solicit or receive contributions, such
23organization shall file, on or before June 30 of each year if
24its books are kept on a calendar basis, or within 6 months
25after the close of its fiscal year if its books are kept on a
26fiscal year basis, instead of the reports required by

 

 

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1subdivisions (a) or (b) of this Section, a statement certified
2under penalty of perjury by its president and chief fiscal
3officer stating the exemption and the facts upon which it is
4based or that such organization did not solicit or receive
5contributions in such fiscal year. The statement shall also
6include a statement of any changes in the information required
7to be contained in the registration form filed on behalf of
8such organization.
9    (d) As an alternative means of satisfying the duties and
10obligations otherwise imposed by this Section, any veterans
11organization chartered or incorporated under federal law and
12any veterans organization which is affiliated with, and
13recognized in the bylaws of, a congressionally chartered or
14incorporated organization may, at its option, annually file
15with the Attorney General the following documents:
16        (1) A copy of its Form 990, as filed with the Internal
17    Revenue Service.
18        (2) Copies of any reports required to be filed by the
19    affiliate with the congressionally chartered or
20    incorporated veterans organization, as well as copies of
21    any reports filed by the congressionally chartered or
22    incorporated veterans organization with the government of
23    the United States pursuant to federal law.
24        (3) Copies of all contracts entered into by the
25    congressionally chartered or incorporated veterans
26    organization or its affiliate for purposes of raising

 

 

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1    funds in this State, such copies to be filed with the
2    Attorney General no more than 30 days after execution of
3    the contracts.
4    (e) As an alternative means of satisfying all of the
5duties and obligations otherwise imposed by this Section, any
6person, pursuant to a contract with a charitable organization,
7a veterans organization, or an affiliate described or referred
8to in subsection (d), who receives, collects, holds, or
9transports as the agent of the organization or affiliate for
10purposes of resale any used or second hand personal property,
11including, but not limited to, household goods, furniture, or
12clothing donated to the organization or affiliate may, at its
13option, annually file with the Attorney General the following
14documents, accompanied by an annual filing fee of $15:
15        (1) A notarized report including the number of
16    donations of personal property it has received on behalf
17    of the charitable organization, veterans organization, or
18    affiliate during the preceding year. For purposes of this
19    report, the number of donations of personal property shall
20    refer to the number of stops or pickups made regardless of
21    the number of items received at each stop or pickup. The
22    report may cover the person's fiscal year, in which case
23    it shall be filed with the Attorney General no later than
24    90 days after the close of that fiscal year.
25        (2) All contracts with the charitable organization,
26    veterans organization, or affiliate under which the person

 

 

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1    has acted as an agent for the purposes listed above.
2        (3) All contracts by which the person agreed to pay
3    the charitable organization, veterans organization, or
4    affiliate a fixed amount for, or a fixed percentage of the
5    value of, each donation of used or second hand personal
6    property. Copies of all such contracts shall be filed no
7    later than 30 days after they are executed.
8    (f) The Attorney General may seek appropriate equitable
9relief from a court, enter into a binding nonjudicial
10settlement agreement, or or, in his discretion, cancel the
11registration of any organization which fails to comply with
12subsection subdivision (a), (b), or (c) of this Section within
13the time therein prescribed, or fails to furnish such
14additional information as is requested by the Attorney General
15within the required time; except that the time may be extended
16by the Attorney General for a period not to exceed 60 days upon
17a timely written request and for good cause stated. Unless
18otherwise stated herein, the Attorney General shall, by rule,
19set forth the standards used to determine whether a
20registration shall be cancelled as authorized by this
21subsection. Such standards shall be stated as precisely and
22clearly as practicable, to inform fully those persons
23affected. Notice of such cancellation shall be mailed to the
24registrant at least 15 days before the effective date thereof.
25    (g) The Attorney General in his or her discretion may,
26pursuant to rule, accept executed copies of federal Internal

 

 

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1Revenue returns and reports as a portion of the foregoing
2annual reporting in the interest of minimizing paperwork,
3except there shall be no substitute for the independent
4certified public accountant audit opinion required by this
5Act.
6    (h) The Attorney General after canceling the registration
7of any trust or organization which fails to comply with this
8Section within the time therein prescribed may by court
9proceedings, in addition to all other relief, seek to collect
10the assets and distribute such under court supervision to
11other charitable purposes.
12    (h-5) The Attorney General, within a binding nonjudicial
13settlement agreement, may accept a written assurance of
14discontinuance of any method, act, or practice alleged to be a
15violation of subsection (a), (b), or (c) from the person who
16has engaged in the method, act, or practice. The Attorney
17General may at any time reopen a matter in which an assurance
18of discontinuance is accepted for further proceedings if the
19Attorney General determines that reopening the matter is in
20the public interest. Evidence of a violation of an assurance
21of discontinuance is prima facie evidence of a violation of
22this Act in any subsequent proceeding brought by the Attorney
23General.
24    (i) Every trustee, person, and organization required to
25file an annual report shall pay a filing fee of $15 with each
26annual financial report filed pursuant to this Section. If a

 

 

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1proper and complete annual report is not timely filed, a late
2filing fee of an additional $100 is imposed and shall be paid
3as a condition of filing a late report. Reports submitted
4without the proper fee shall not be accepted for filing.
5Payment of the late filing fee and acceptance by the Attorney
6General shall both be conditions of filing a late report. All
7late filing fees shall be used to provide charitable trust
8enforcement and dissemination of charitable trust information
9to the public and shall be maintained in a separate fund for
10such purpose known as the Illinois Charity Bureau Fund.
11    (j) There is created hereby a separate special fund in the
12State Treasury to be known as the Illinois Charity Bureau
13Fund. That Fund shall be under the control of the Attorney
14General, and the funds, fees, and penalties deposited therein
15shall be used by the Attorney General to enforce the
16provisions of this Act and to gather and disseminate
17information about charitable trustees and organizations to the
18public.
19    (k) The changes made to this Section by this amendatory
20Act of the 103rd General Assembly are inoperative on and after
21January 1, 2029.
22(Source: P.A. 100-201, eff. 8-18-17.)
 
23    Section 99. Effective date. This Act takes effect January
241, 2024.