Public Citizen s Constitutional Challenge to Jefferson County, Ky., Charitable Solicitation Ordinance Forces County to Rewrite Law
Dec. 18, 2000
Public Citizen s Constitutional Challenge to Jefferson County, Ky., Charitable Solicitation Ordinance Forces County to Rewrite Law
WASHINGTON, D.C. — The national consumer advocacy group Public Citizen announced today that it has dismissed its lawsuit challenging the constitutionality of a Jefferson County, Ky., charitable solicitation ordinance because the county had rewritten the law to remove the objectionable features.
Public Citizen filed its lawsuit in federal district court in Louisville, Ky., on June 26, joined by the environmental group Greenpeace and two umbrella organizations American Charities for Reasonable Fundraising Regulation and the National Federation of Nonprofits. They joined because their members and supporters also were affected by the law being challenged and laws of other jurisdictions that have a similar impact on interstate charitable fundraising. Before any litigation occurred, however, the county proposed changing its ordinance so that compliance with Kentucky law would satisfy the county. After the county enacted an amendment on Nov. 21 (copy attached), the parties agreed to dismiss the case, and the court entered its order of dismissal on Dec. 13.
“This is a total victory, not only for Public Citizen, but for all charities,” said Alan B. Morrison, director of the Public Citizen Litigation Group and lead counsel for the plaintiffs. “The county wisely recognized that it could not defend the indefensible, and so it took the quick and inexpensive way out.”
The plaintiffs did not seek to recover their legal bills, but the defendant has agreed to repay the $150 filing fee.
The amendment states that “there may be some redundancy” between the county s requirements and those of the Commonwealth of Kentucky. The amendment also acknowledges that Kentucky law, which requires a charity only to send the state copies of the Form 990 (which must be filed annually with the Internal Revenue Service), “provides the relevant information for essential compliance with” the county s ordinance. The new law further notes that the change is being made so that the ordinance is “non-redundant and not burdensome,” which were the two basic problems that Public Citizen had with the prior version of the law.
“Unfortunately, there are other localities as well as states that impose extremely burdensome and costly reporting requirements on charities that solicit by mail, and we intend to bring another lawsuit in the near future to test those laws,” said Morrison. “The latest threat is that certain places are claiming that if a charity accepts contributions on its Web site, the charity is soliciting in its jurisdiction, since the Web is accessible throughout the United States. Obviously, we do not intend to let that position go untested.”
Several aspects of the old Jefferson County ordinance were unusually burdensome and invasive of the privacy of the officers and employees of charities. Under the prior law, the county demanded plans about a charity s fundraising that went far beyond what other jurisdictions and the IRS require.
For example, Public Citizen would have had to disclose the names, home addresses, telephone numbers and Social Security numbers of employees who have control over funds raised and disbursed from all solicitations. In addition, the law required charities to submit detailed projections of revenue to be raised and the costs of doing so, seemingly tied to each separate fundraising campaign. Changes in information on a registration form, such as the home telephone number of a listed employee or the addition of a new bank account where solicited funds are deposited, had to be updated within five business days. To top it off, the county insisted that charities file their reports on a calendar year basis, while Public Citizen keeps its books and files with the IRS on an October 1 fiscal year basis.
Jefferson County and the Commonwealth of Kentucky are not alone in seeking to regulate charitable solicitation; 38 states and the District of Columbia require charitable organizations to register if they intend to solicit. The nature of what must be reported varies widely, with many states imposing significantly more burdensome registration requirements than Kentucky.
“Since our IRS 990s are on our Web site, we don t think we should have to send copies to Jefferson County or anyone else,” Morrison said. “Now that so many organizations post their 990s on the Web, we hope that states will eliminate requirements that are burdensome both for the states and charitable organizations.”
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