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2. Colorado Charitable Solicitations Act (Title 6, Article 16, C.R.S.)
The Colorado Charitable Solicitations Act (“the Act”) governs charitable fundraising activities in Colorado and applies to four types of entities involved with fund raising: charitable organizations, paid solicitors, professional fundraising consultants, and commercial coventurers.
Charitable organization
Defined as any person who is or holds himself out to be established for any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public health, environmental conservation, civic, or other eleemosynary purpose, any person who operates for the benefit of the objectives of law enforcement officers, firefighters, other persons who protect the public safety, or veterans, or any person who in any manner employs a charitable appeal or an appeal which suggests that there is a charitable purpose as the basis for any solicitation [1] .
Paid solicitor
A person who, for monetary compensation, performs any service in which contributions will be solicited in Colorado by such compensated person or by any compensated person he or she employs to solicit for contributions. [2] A director, officer, or compensated employee who is directly employed by a 501 (c) (3), (c) (4), (c) (8), (c) (10), or (c) (19) charitable organization is not considered a paid solicitor, nor is a bona fide volunteer [3] or grant writer (as long they don’t earn commissions on the amount of funds raised). Fundraising activities by such persons employed by or volunteering for the charity will be reflected in the charitable organization’s overall financial statements (available online). Paid solicitors, in addition to filing annual registration statements, must file a solicitation notice before commencing a solicitation campaign, and must file a financial report on the results of such a campaign within 90 days of its conclusion. The Annual Report on Charitable Solicitations summarizes the results of these solicitation campaigns.
Professional fundraising consultant
Any person, other than a bona fide officer or regular employee of a charitable organization, who is retained by a charitable organization for a fixed fee or rate under a written agreement to plan, manage, advise, consult, or prepare material for a solicitation of contributions for a charitable organization, but who does not solicit contributions or employ, procure, or engage any compensated person to solicit contributions . [4] Professional fundraising consultants do not need to register unless they will have custody or control of contributions from a solicitation, but they are still subject to other requirements in the Act concerning contracts, banking, and record-keeping. They are also obligated to provide financial reports of solicitation campaigns directly to the charitable organizations, but since they are not required to file these financial reports with the Secretary of State, their activities are not reflected in the annual report.
Commercial coventurer
A person who, for profit, is regularly and primarily engaged in trade or commerce other than in connection with soliciting for charitable organizations or purposes and who conducts a charitable sales promotion. Commercial co-venturers are not required to register, but they are required to make disclosures regarding the dollar amount or percent per unit of goods or services purchased or used that will benefit the charitable organization or purpose [5]. They are also encouraged to follow the Better Business Bureau’s best practices regarding charitable sales promotions (AKA “cause marketing”) as stated in Standard 19 of the BBB Wise Giving Alliance Standards for Charity Accountability.