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California Commercial Fundraiser for Charitable Purposes ($25,000) Bond
Commercial fundraisers for charitable purposes, as specified by Section 12599.5 of the California Government Code, are required to submit or already have on file with the Registry of Charitable Trusts of the Department of Justice a surety bond in the amount of $25,000.
In accordance with Section 12599.5 of the California Government Code, the prerequisite of a surety bond serves to guarantee conformance with the provisions of this Code. When the proprietor or its representative or employee receives funds that are the subject of the bond, the bond is contingent on the principal paying any and all amounts that are owed to any entity.
In addition to that, the principal is responsible for compensating all parties who have been harmed as a result of any illegal actions or omissions that occurred while the business was being operated as a fundraiser.
The California Commercial Fundraiser for Charitable Purposes Bond is required of anyone who desires to engage in the practice of conducting commercial fundraising for philanthropic purposes. According to Section 12599 of the California Government Code, any individual, corporation, organization (incorporated or not incorporated), or any other legal company that meets the following criteria is considered to be conducting commercial fundraising:
- Utilizes, obtains, or contracts any compensated person to request, receive, or control philanthropic donations of money, assets, or property.
- Gets donations of money, assets, or property that were requested with the intention of using them for philanthropic purposes.
- Encourages the donation of money, assets, or property to benevolent causes.
Bond Amount
Those who desire to engage in commercial fundraising for charitable organizations in the state of California are required to post a collateral in the amount of $25,000. However, the California Commercial Fundraiser for Charitable Purposes Bond is susceptible to underwriting consideration, which means that the price will be based on the principal’s credit score. This can be a significant disadvantage. Those with a good credit score have the opportunity to purchase the California Commercial Fundraiser for Charitable Purposes Bond for as little as 1% of the total amount, or $250.
The California Office of the Attorney General mandates that organizations holding commercial fundraisers for benevolent causes must issue surety bonds in the amount of $25,000.
Why Is It Important?
Bonds for philanthropic fundraisers in the state of California are required in order to guarantee that the proprietors running the fundraisers will abide by the regulations outlined in subsection (a) of section 12599 of the Government Code of the State of California.
In the context of this relationship, unethical actions include the following:
- Misleading individuals into believing that money and funds collected are being used for philanthropic objectives when, in reality, this is not the case.
- Using the name of a charitable organization without first obtaining written permission to do so.
- Making use of any device, strategy, or contrivance in order to commit deception or acquire money by means of misrepresentation or assertions that are misleading is illegal.
- Neglecting to present any papers or records belonging to such organizations to the Attorney General.
In addition to that, a California Commercial Fundraiser for Charitable Purposes Bond safeguards the general public from unscrupulous business practices such as the following:
- Failure to provide the Attorney General with the appropriate financial documentation and documents pertaining to the organization.
- Causing people to believe that money or assets are being collected for philanthropic purposes when, in reality, they are being gathered for other purposes is a form of deception.
- Using the name of a charitable organization without first obtaining written permission to do so.
- Committing deception through the use of any method, tool, technique, or stratagem.
In the state of California, you are required to acquire a commercial fundraising bond before you can lawfully collect contributed monetary funds or property on behalf of a benevolent organization.
Qualifications/Requirements
In the state of California, any person or organization that solicits contributions for philanthropic purposes, or that intends to employ another person or business to do so, is required to acquire the appropriate certification.
The following information must be included on the application:
- CF Registration Number
- Identifier for Federal Employers identity
- Official address
- The official name and location of the fundraising event held by a commercial organization for philanthropic purposes
- All of the other identities and locations under which the benevolent organization is known to function
On the registration form, candidates are required to check off whether they operate as a single proprietorship, partnership, unincorporated organization, or corporation in their professional capacity.