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Charitable solicitations involve a variety of speech interests that are within the protection of the First Amendment, and therefore have not been dealt with as purely commercial speech.
North Carolina amended its Charitable Solicitations Act in 1985 as a response 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. As amended, the Act prohibits professional fundraisers from retaining an unreasonable or excessive fee, a term defined by a three-tiered schedule. Appellees National Federation of the Blind Of North Carolina, Inc. et al., a coalition of professional fundraisers, charitable organizations, and potential donors brought suit against appellant government officials, Riley, District Attorney of the Tenth Prosecutorial District of North Carolina, et al., charged with the enforcement of the Act seeking injunctive and declaratory relief. Appellees contended that the Act infringed upon their freedom of speech. The appellant government argued that the Act regulated only commercial speech because it related only to the professional fundraiser's profit from the solicited contribution. The district court ruled that the challenged provisions on their face unconstitutionally infringed upon freedom of speech and enjoined their enforcement. The court of appeals affirmed. Hence, the appellant government appealed.
Did the North Carolina Charitable Solicitations Act unconstitutionally infringe upon freedom of speech?
The Court held that the Act prohibited professional fundraisers from retaining an unreasonable or excessive fee. The court ruled that even assuming that such speech in the abstract was indeed merely commercial, the court did not believe that the speech retained its commercial character when it was inextricably intertwined with otherwise fully protected speech. The court concluded that the state's interest was not as weighty as the state asserted and that the means chosen to accomplish it were unduly burdensome and not narrowly tailored. The court, therefore, affirmed the judgment of the court of appeals and held that the Act was unconstitutional and infringed upon freedom of speech.