Types of Fund Raising Professionals New York law requires registration of “Professional Fund Raisers” (PFR) and “Fund Raising Counsel” (FRC). The legal definitions of PFR and FRC (printed below) are quite com plex and should be read in their. The following sim plified definitions m ay be useful in understanding the differences between the two categories: PFRs are fund raising professionals who, in addition to other activities, conduct the solicitation of contributions and/or handle the donations. FRCs are fund raising professionals who do not solicit contributions or handle donations, but lim it their activities to advising or assisting a charitable organization to perform such functions itself.
Before Engaging A Fund Raising Professional
! Make sure that your charitable organization is
registered with the Charities Bureau and current in its annual financial filings.
! Make certain that the fund raising professional
(PFR or FRC) is registered with the Charities Bureau and in com pliance with all filing requirem ents. < Obtain a statem ent from the PFR/FRC, signed under penalties for perjury, confirm ing that it is registered and in com pliance with all filing requirem ents. < Make a phone call/send an em ail to the Charities Bureau’s Albany office to verify a PFR/FRC’s registration status.
ATTORNEY GENERAL ANDREW M . CUOM O
Dear Friends: New York is hom e to thousands of charitable organizations. Many of those charities hire fund raising professionals to raise funds, or assist in raising funds, on their behalf. Fund raising professionals are hired for m any reasons. Som e organizations do not have sufficient staff to raise funds. Others do not have the expertise necessary to conduct fund raising cam paigns. Sm all organizations m ay view professional fund raising cam paigns as a way to get m ore people involved in their causes. W hatever your organization's reason for hiring a fund raising professional, it is im portant to learn as m uch as possible about the fund raising professional's experience and record before signing a fund raising contract. Heeding the tips listed below should contribute to the success of your organization’s fund raising cam paigns and help protect it from financial loss, dam age to its reputation and other problem s that m ay result from hiring an inexperienced or unscrupulous fund raising professional. Sincerely, Andrew M. Cuom o
! Identify m ore than one PFR or FRC and acquire
inform ation about each. < Ask each PFR or FRC or the Attorney General’s Charities Bureau for copies of the fund raising professional’s contracts with other charitable organizations. PFRs and FRCs m ust file such contracts with the Attorney General. < If the fund raising professional is registered as a PFR, obtain copies of its financial reports of fund raising cam paigns conducted on behalf of other charities. < If a PFR will conduct telem arketing for your organization, consult the Attorney General’s annual report of telem arketing cam paigns, Pennies for Charity, for inform ation on how m uch of the funds raised by the PFR was retained by each charity. < Contact charitable organizations that have previously engaged the PFR or FRC. Find out if the fund raising professional m et all of its contractual obligations and whether there were any problem s.
! Professional Fund Raiser (PFR) - “Any person
who directly or indirectly, by contract, including but not lim ited to sub-contract, letter or other agreem ent or other engagem ent on any basis, for com pensation or other consideration (a) plans, m anages, conducts, carries on or assists in connection with a charitable solicitation or who em ploys or otherwise engages on any basis another person to solicit from persons in this state for or on behalf of any charitable organization or any other person, or who engages in the business of, or holds him self out to persons in this state as independently engaged in the business of soliciting for such purpose; (b) solicits on behalf of a charitable organization or any other person; or (c) who advertises that the purchase or use of goods, services, entertainm ent or any other thing of value will benefit a charitable organization but is not a com m ercial co-venturer.” Executive Law § 171-a.4.
! Fund Raising Counsel (FRC) - “Any person who
for com pensation consults with a charitable organization or who plans, m anages, advises or assists with respect to the solicitation in this state of contributions for or on behalf of a charitable organization, but who does not have access to contributions or other receipts from a solicitation or authority to pay expenses associated with a solicitation and who does not solicit.” Executive Law § 171-a.9. A complete copy of Article 7-A of the Executive Law and its
! Obtain proposals from several PFRs or FRCs and
negotiate the best possible contract for the charitable organization. Except for certain statutory requirem ents (see next section), any item in a contract is negotiable.
! Involve m ore than one person from your charitable
organization in negotiating the contract.
! Carefully read the final written contract before
signing it. Have an attorney review the contract first.
Statutory Contract Requirements
After Engaging A Fund Raising Professional
! All contracts between a PFR/FRC and a charitable
organization m ust be w ritten and must contain: < The nam e, address and NYS ID# (registration #) of each contracting party. < Beginning and expiration dates of the contract. < A clear description of the services to be provided. < A clear statem ent of the financial term s. < A statem ent that the charity has the right to cancel the contract without cost, penalty or liability within fifteen days after the fund raising professional files the contract with the Charities Bureau. (A contract m ust be filed with the Charities Bureau by the PFR / FRC within ten days of signing.) < Dated signatures of each contracting party.
! Regularly obtain and review copies of all invoices
and receipts for expenses incurred by the PFR/FRC. Make sure all valid bills from third party vendors received by either the fund raising professional or the charity are paid on tim e.
TIPS FOR CHARITIES RAISING FUNDS IN NEW YORK STATE QUESTIONS TO ASK BEFORE AND AFTER SIGNING A CONTRACT W ITH A FUND RAISING PROFESSIONAL
!
Maintain regular com m unication with the PFR/ FRC throughout the contract period. Attem pt to resolve any issue as soon as it arises.
! W hen a PFR receives funds from a solicitation, be
certain that the charitable organization is given periodic accountings of the fund raising cam paign and that the PFR m aintains accurate and current records of gross revenue received (to be forwarded to the charity) and expenses incurred by the PFR (to be reim bursed by the charity).
! W henever a PFR is authorized to receive funds from a solicitation conducted on behalf of a charitable organization, the gross revenue received by the PFR, without any deductions for its fees or expenses, m ust be deposited in a bank account under the exclusive control of the charity within five days of receipt by the PFR. Any fees and\or reim bursem ents due to a PFR for its services are paid from funds within the charity’s control.
Statutory Solicitation Disclosures
! If telem arketing is conducted by a PFR or its
em ployees (Professional Solicitors), m ake periodic visits to the locations from which calls are m ade and listen to what is being said. If calls are taped, listen to a sam pling of the recordings. Review all training m aterial used by the PFR. Each individual Professional Solicitor m ust be separately registered with the Charities Bureau. Review their registrations.
ANDREW M . CUOM O ATTORNEY GENERAL New York State Attorney General Charities Bureau Registration Section - Charities 120 Broadway New York, NY 10271 (212) 416-8401 Charities.Bureau@oag.state.ny.us Registration Section - Fund Raising Professionals The Capitol Albany, NY 12224 (518) 486-9797 Charities.Fundraising@oag.state.ny.us http://www.oag.state.ny.us/bureaus/charities/about.html
! Ask to see all written solicitations and scripts
developed by the PFR/FRC. < Solicitation m aterial m ust include the nam e of the charitable organization exactly as it is registered with the Charities Bureau. < Solicitation m aterial should accurately describe the charitable organization, its activities and the purposes for which contributions are being solicited. < All solicitations m ust advise potential contributors that a copy of the charitable organization’s m ost recently filed annual financial report is available from the organization itself or the Charities Bureau. < Any solicitation conducted by a PFR or any of its employees (Professional Solicitors) m ust disclose the nam e of the specific Professional Solicitor, the nam e of the em ploying PFR and a statem ent that the solicitor is being paid to raise funds.
! After the expiration of a contract with a PFR, or on
an annual basis if a contract is for m ore than a one year period, m ake sure that the PFR prepares a Professional Fund Raiser Interim/ Closing Statement (CHAR037), the financial report required to be filed with the Charities Bureau by a PFR. < CHAR037 m ust be signed by a representative of the charitable organization. < CHAR037 m ust be filed by the PFR within ninety days of the contract’s term ination date or anniversary date (if the contract period is m ore than one year). NOTE - Com plete copies of Article 7-A of the Executive Law and regulations are available on the Charities Bureau’s Internet site at: http://www.oag.state.ny.us/bureaus/charities/pdfs/st atute_booklet.pdf