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Supreme Court of the United States
March 23, 1988, Argued ; June 29, 1988, Decided
[*784] [***681] [**2671] JUSTICE BRENNAN delivered the opinion of the Court.
The North Carolina Charitable Solicitations Act governs the solicitation of charitable contributions by professional fundraisers. As relevant here, it defines the prima facie "reasonable fee" that a professional fundraiser may charge as a percentage of the gross revenues solicited; requires professional fundraisers to disclose to potential donors the gross percentage of revenues retained in prior charitable solicitations; and requires professional fundraisers to obtain a license before engaging in solicitation. The United States Court of Appeals for the Fourth Circuit held that these aspects of the Act unconstitutionally infringed upon freedom of speech. We affirm.
Responding to a study showing that in the previous five years the State's largest professional fundraisers had retained as fees and costs well over 50% of the gross revenues collected in charitable solicitation drives, North Carolina amended its Charitable Solicitations Act in 1985. As amended, the Act prohibits professional fundraisers from retaining an "unreasonable" or "excessive" fee, 2 a term defined by a three-tiered [****8] schedule. 3 A fee up to [***682] 20% of the gross [*785] receipts collected is deemed reasonable. If the fee retained is between 20% and 35%, the Act deems it unreasonable upon a showing that the solicitation at issue did not involve the "dissemination of information, discussion, or advocacy relating to public issues as directed by the [charitable organization] which is to benefit from the solicitation." Finally, a fee exceeding 35% is presumed unreasonable, but the fundraiser may rebut the presumption by showing that the amount of the fee was necessary either (1) because the solicitation involved the dissemination of information or advocacy on public issues directed by the charity, or (2) because otherwise the charity's ability to raise money or communicate [**2672] would be significantly [*786] diminished. As the State describes the Act, even where a prima facie showing of unreasonableness has been rebutted, the factfinder must still make an ultimate determination, on a case-by-case basis, as to whether the fee was reasonable -- a showing that the solicitation involved the advocacy or dissemination of information does not alone establish that the total fee was reasonable. See Brief for Appellants 10-11; Reply [****9] Brief for Appellants 2-3.
[****10] The Act also provides that, prior to any appeal for funds, a professional fundraiser must disclose to potential donors: (1) his or her name; (2) the name of the professional solicitor or professional fundraising counsel by whom he or she is employed and the name and address of his or her employer; and (3) the average percentage of gross receipts actually turned over to charities by the fundraiser for all charitable solicitations conducted in North Carolina within the previous 12 months. 4 [***683] Only the third disclosure requirement is challenged here.
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487 U.S. 781 *; 108 S. Ct. 2667 **; 101 L. Ed. 2d 669 ***; 1988 U.S. LEXIS 3031 ****; 56 U.S.L.W. 4869
RILEY, DISTRICT ATTORNEY OF THE TENTH PROSECUTORIAL DISTRICT OF NORTH CAROLINA, ET AL. v. NATIONAL FEDERATION OF THE BLIND OF NORTH CAROLINA, INC., ET AL.
Prior History: APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT.
National Fed'n of Blind, Inc. v. Riley, 817 F.2d 102, 1987 U.S. App. LEXIS 5280 (4th Cir. N.C., 1987)
Disposition: 817 F. 2d 102, affirmed.
fundraisers, solicitation, regulation, license, charitable, disclosure, collected, charitable solicitations, protected speech, cases, dissemination of information, narrowly tailored, potential donor, donations, advocacy, donor, volunteer, disclose, costs, contributions, licensing provisions, fee provision, dissemination, engaging, invalid, drive, charitable organization, license application, strict scrutiny, expenses
Business & Corporate Law, Nonprofit Corporations & Organizations, General Overview, Tax Law, Deductions, Charitable Deductions, Constitutional Law, Freedom of Speech, Commercial Speech, Misleading Speech, Fundamental Freedoms, Scope, Governments, Public Improvements, State & Territorial Governments, Licenses, Judicial & Legislative Restraints, Time, Place & Manner Restrictions