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May 9, 2006

Governor Blagojevich signs legislation to regulate professional fundraisers
New law is in response to Chicago scam that cheated charities & their donors

SPRINGFIELD In an effort to protect both charities and the people who donate to them from being swindled, Governor Rod R. Blagojevich today signed legislation that will require stricter reporting requirements for fundraisers. House Bill 4315 was sponsored by State Rep. James Brosnahan (D – Oak Lawn) and State Sen. John Millner (R – St. Charles).
“When people donate to a charity, they should feel confident that their contribution will reach people who need help,” said Gov. Blagojevich. “This new law will make sure that neither charities or donors are being ripped off.”
HB 4315 was introduced in response to a scam uncovered by CBS 2 Chicago, and the Naperville Sun in November 2005. A salvaging business run by a felon was collecting donated cars on behalf of charities and then allegedly keeping either the vehicles or the profits from their sale. The donors never received proof of their donation, and the charities never received their contributions.
Specifically, the new law will expand the definition of “professional fundraiser” to include the middlemen who receive or collect donations, such as the salvaging business, in addition to those who solicit those donations, the only group that was previously regulated. The donation of cars, boats, or motorcycles would require stringent registration and reporting requirements, and the sale of any vehicle would require a statement to be filed with the Attorney General. That statement would have to include the vehicle identification number, fees collected for and the resale value of the vehicle, and the identities of all the people involved.
“This law will increase the Office of the Attorney General’s ability to combat fraudulent fundraising schemes by requiring those who are engaged in the for-profit business of collecting and processing donations intended for charity to register and report their activities to my office,” Attorney General Lisa Madigan said.  “It also will help ensure that donors’ contributions are accounted for and enable my office to take action against those for-profit middlemen who misuse or fail to account for the donations they collect.”
“When people open up their hearts and their wallets to give to charities, they believe their contribution goes toward a worthy cause, but that is not always the case. It is wrong for a third-party contractor hired to collect donations to take an exorbitant amount of that donation and profit form it,” said Rep. Brosnahan. “This new law provides the necessary safeguards to prevent this from happening, and I applaud the governor for his action today.”
“In many cases car donors think their vehicle and its subsequent proceeds are going to the charity of their choice, when in reality, it has been found that their cars and money have been kept by shady middlemen,” Sen. Millner said “This bill will keep criminals from taking advantage of the public and charitable organizations by adding some sunshine to their business practices.”
HB 4315 is effective January 1, 2007.


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