A new law was recently passed in the California legislature, AB 488 (Irwin), which will provide important new protections for online donors and nonprofits receiving online funds. Fundraising platforms will no longer be able to hide fees, use nonprofits’ names to raise funds without permission, or hang onto donations indefinitely.
Under this new law, platforms will have to disclose all processing fees upfront. They’ll need to get consent, in most cases, before using a nonprofit’s name to solicit funds. And they’ll be required to distribute donations to nonprofits promptly and offer some transparency to the money’s path. Online platforms will have to register with the Attorney General (AG), placing them under the AG’s supervision going forward.
“This legislation impacts every single person who clicks on that ‘donate now’ button and every single nonprofit that receives funding this way,” said Jan Masaoka, CEO of CalNonprofits. “It may be low-profile but it’s most certainly high-impact and meaningful.”
CalNonprofits and other civic-minded fundraisers are hopeful that these much-needed regulations will increase donor trust in online platforms and result in increased online giving. The law goes into effect January 1, 2023.