Colorado House Bill 16-1129 was signed on June 8, introducing new regulations designed to combat charitable fraud. The bill takes effect on August 10, 2016. One section of HB 16-1129 increases penalties for charitable fraud, adds definitions of more fraudulent actions, and adds a surety bond requirement for paid solicitors.
Paid solicitors for charitable organizations will need to file a $15,000 surety bond with the Colorado Secretary of State. The bond ensures the solicitor will not misrepresent the charity or commit charitable fraud. Specifically, HB 16-1129 mandates that solicitors cannot misrepresent the charity as having a significant number of members who are active police, sheriff, patrol, firefighters, first responders or veterans if the organization does not. The bill defines a significant number as 100 members or ten percent of the organization’s membership, whichever is larger.
Other examples of fraudulent charitable solicitation are leading a person to believe that donating will earn the donor special treatment from law enforcement or government agencies; or that not donating will earn the donor unfavorable treatment from the same agencies. The charitable organization that employs the solicitor is liable if the solicitor commits charitable fraud.
The paid solicitor bond must be renewed annually along with the solicitor’s license, which can be done through a bond continuation certificate. Solicitors do not need to submit a surety bond until their next license renewal date.
HB 16-1129 had considerable support from charitable organizations in the state, including the Colorado Nonprofit Association. The organization urged Coloradans to contact state legislators and ask them to support the bill and provided a script for callers.