Selected 2022 Developments in Nonprofit Organizations Law and Nonprofit Organizations Committee Highlights

• Publication year: 2023
• Author: Written by Steven Chiodini

SELECTED 2022 DEVELOPMENTS IN NONPROFIT ORGANIZATIONS LAW AND NONPROFIT ORGANIZATIONS COMMITTEE HIGHLIGHTS

Written by Steven Chiodini^*

Throughout 2022, the Nonprofit Organizations Committee ("NPO Committee") has continued to offer regular monthly updates on California nonprofit legislation of interest to nonprofit organizations, including also those bills in which the NPO Committee itself has provided for legislators input of benefit to the California nonprofit community.

In addition, California regulatory activity of interest to nonprofits has been reported on at NPO Committee meetings by the various California regulators referred to below. Selected significant California regulatory nonprofit developments in 2022 include the following by the California Attorney General:

Charitable Fundraising Platforms and Platform Charities: The Attorney General issued two rounds of proposed rulemaking under Assembly Bill 488 ("AB 488"), initially on May 27, and subsequently with modifications on November 21. Although AB 488 took effect as of January 1, 2023, the November modifications state that the Department of Justice proposes to delay the effective date of the regulations to January 1, 2024. Among other things, the regulations set new registration, reporting, disclosure, and consent requirements for Internet fundraising platforms and "platform charities" that facilitate fundraising on these platforms.

Disposal of Charitable Assets: On October 21, the Attorney General posted proposed regulations under Assembly Bill 900, which took effect on July 1, 2022, and requires trustees of charitable trusts to give twenty days prior notice to the Attorney General before they sell, transfer, or otherwise dispose of all or substantially all a trust's charitable assets. (This new requirement generally mirrored the existing notice requirement that has applied to charities organized as nonprofit public benefit corporations as well as to any charitable assets held by nonprofit mutual benefit corporations.) Among other things, the new regulations would clarify that "substantially all" means assets representing 75% or more of the value of all the assets held during a specific timeframe.

Nonprofit Raffles: As an exception to the constitutional prohibition on lotteries, eligible nonprofit organizations in California are permitted to conduct raffles to directly support beneficial or charitable purposes in California, provided an organization registers with the Attorney General before...