HOW TO FILE A COMPLAINT AGAINST A CHARITY

Have a complaint against a charity or other public benefit corporation? Please use our complaint form. Mail the completed form and any attachments to: Registry of Charitable Trusts, Office of the Attorney General, P.O. Box 903447, Sacramento, CA 94203-4470.

NEW REQUIREMENTS FOR INITIAL REGISTRATION BY CHARITIES

Charities registering for the first time with the Attorney General’s Registry of Charitable Trusts must now complete a new form, the CT-1, and provide the materials and information required by newly amended section 300 of the Attorney General’s regulations. For a summary of the principal documents and information needed to register, check the initial registration guide. The new initial registration requirements for charities became effective January 10, 2008.

NEW PUBLICATIONS

• 2005 Report on Commercial Fundraising.
• 2005 Supplemental Report on Thrift Stores and Vehicle Donations.
• Updated Guide for Dissolving Charities.

ENFORCEMENT ACTIONS

Noah’s Wish

Noah’s Wish, a charity formed to respond to the needs of animals affected by disasters, has agreed with the Attorney General to pay over $4 million into a fund for rescuing and caring for the animal victims of Hurricane Katrina. The Attorney General has placed the money in a restricted fund with the Greater New Orleans Foundation, and the foundation will be responsible for distributing the funds in accordance with the settlement agreement. For additional information, please contact the Greater New Orleans Foundation (www.gnof.org).

The settlement was reached after an investigation by the Attorney General concluded that much of the roughly $8 million in contributions received by Noah’s Wish in response to its solicitations after Hurricane Katrina had not been spent to help animals affected by the Katrina disaster. Under the settlement agreement, Noah’s Wish also agrees to increase its number of board members, provide governance training to its board, pay the Attorney General’s investigative fees and costs, and not to employ its founder and former president and board member, Terri Crisp, in any manner. Under the agreement, Crisp agrees that she will never again serve Noah’s Wish in any capacity and will not serve as an officer, director, or trustee of any charity for a period of five years.

Red Cross

The American Red Cross has agreed to reform fundraising disclosure and executive compensation practices in California under a formal agreement reached with the Attorney General. Violations of the agreement are subject to lawsuits for damages caused by the breach of contract.

The agreement resolves an investigation initiated in 2002 by the Attorney General’s charitable trust section into allegations of improper handling of disaster relief funds for victims of the 2001 Alpine-Viejas Fire.

The investigation found that ARC and its San Diego and Imperial Counties Chapter (SDIC) used misleading solicitation practices to generate donations in the wake of the fire that were not earmarked for the fire disaster relief. The investigation also found that ARC’s policies and procedures governing executive compensation were wholly inadequate and provided virtually no national oversight of local chapters and former SDIC CEO Dodie Rotherman was substantially overpaid during fiscal years 1997-2001.

After presenting the investigation’s findings to ARC and SDIC officials, ARC agreed to distribute roughly $55,000 to Alpine-Viejas fire victims. ARC also now requires greater oversight of initiative pay, merit salary adjustments and bonuses of executives in California and is applying the new procedures nationwide.

Sensory Intergration

Sensory Intergration (sic) International is a nonprofit corporation that purports to treat children with sensory integration deficiencies and to offer educational programs for health professionals who treat persons with sensory integration problems. We learned that Sensory Intergration was commingling charity assets with the personal assets of one of its officers, engaging in self-dealing transactions where personal interests conflicted with those of the charity, and failing to refund fees for canceled seminars. We also discovered that substantial charitable assets have been improperly diverted by those in control of the charity.

The Attorney General filed a civil complaint against Sensory Intergration and other defendants, including various current and former officers and directors, seeking damages, civil penalties, restitution, an accounting, appointment of a receiver, and involuntary dissolution of the charity. The complaint also sought an injunction preventing the defendants from controlling the assets of Sensory Intergration and from conducting any business on its behalf, including charitable solicitations.

On June 22, 2007, the Attorney General obtained a preliminary injunction prohibiting, throughout the United States, the conduct of any business activities regarding Sensory Intergration and further prohibiting the exercise of control over any of the charity’s assets.

NEW LAW FOR CHARITY
“POKER NIGHT” FUNDRAISERS

Beginning January 1, 2007, a new California law allows eligible nonprofit organizations that have been in existence for at least three years and register with the Division of Gambling Control to hold “charity poker night” fundraisers under specified circumstances. To learn more about the permitted controlled games, see Division of Gambling Control.