• Procure bonds in 36 states. Problems for mobile operations: This is an additional business expense. Minimum bond deadlines will preclude late-added spots. • Submit to control by your sponsors. Problems for mobile
fundraiser is being paid, the legal name of the charity, and how the charity will use the funding.
non-professional sponsors.
All of this complexity will be compounded if you travel
have a regulatory system that is so burdensome and impracticable that the mobile amusement industry as we know it cannot comply.
The Crisis All of this came to a head in a recent Pennsylvania case.
While investigating the fundraising activities of a volunteer
the VFD’s contract with the carnival contained a revenue split, which the regulator regarded as a common payment
rate for food concessions was not questioned. The regulator then went on the carnival’s website. The regulator surmised from the names of events that the various schools, churches, charities. The website included:
that the carnival specialized in fairs, festivals, churches,
carnival “actually donates a percentage of our gross sales to
• Testimonials from sponsors describing carnivals as
efforts through the National Association of State Charity
pertinent guidance as to how easy it is to become a commercial fundraiser
• appeals to any charitable purpose. This might be as simple
• implies that a portion of the revenue will go to a charitable purpose or be donated to a charity. In the Pennsylvania
case, the agency simply presumed these facts without any supporting evidence. According to the Pennsylvania
whether by sign or presence. Money spent at the carnival (whether on rides, games or food) is spent with the
regulator, - “Everyone who has ever attended a fundraising carnival knows that the charitable organization’s name and
Solutions
The regulator contended that a commercial fundraiser was
For these reasons, the Pennsylvania regulator sent a letter demanding that the carnival register as a commercial fundraiser or declare why the carnival did not so qualify. The letter demanded that the carnival turn over the identity of all charities supported, contracts with those charities, and all solicitation material.
The carnival never responded to the cease-and-desist
letter. At the subsequent hearing, the Pennsylvania regulator concluded that the carnival was a commercial fundraiser. It the appellate court concluded that there was “substantial as a commercial fundraiser.
varies so much from one state to another. Nevertheless, there is enough similarity to make some suggestions. You have a choice between three risk management strategies. 1. Do nothing. All of this complexity does hinder the ability of state regulators to enforce statutes as written because they are stretched thin. Nevertheless, burying your head in the sand will not get you far; state law requirements to register and report are different, deadlines are dissimilar, and compliance is time-consuming and confusing. Fines,
disgorgement of illegally solicited contributions can total
routinely featured legal developments and coordinated enforcement actions on their website for more than a decade. And your sponsors in 43 states are required to
carnivals not regularly carried on that are conducted for the primary purpose of raising funds. Fundraising events do not include… the conduct of a trade or business that is
OABA ShowTime Magazine • MAY 2024
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